Debt Relief. What’s the best solution.
If you’re having challenges managing your debt load, there’s always a way out many times the options simpler and less harmful than most people expect. You’ve probably heard or see many of the ads on TV radio talking about that consolidation credit counseling consumer proposals and bankruptcy and wondered what the differences are between all these offerings.
We’re going to simplify this for you so at the end of this video you’ll have a clear idea of what each option involves so that you can choose the debt solution that is right for you.
Let’s start with nonprofit credit counseling.
Credit counselors work with you to prepare a budget which allows you to repay all of your outstanding debt overtime by adjusting or working with your budget in this option you negotiate to repay the full amount owed and they work with your creditors to reduce the interest rate if the debt is small and you have a small number of creditors and have an income after meeting your living expenses. This may be a viable option for you.
Let’s look at informal debt settlement.
An informal debt settlement occurs when the debtor and the specific creditor agree to accept a reduced amount of money and full settlement are the original debt a debt counselors used to accomplish this.
This may make sense if you only have one creditor and you have the funds available to pay this settled amount in full. If you have several creditors and not the funds to pay a bulk settlement this option may not be effective.
Third option is a consumer proposal.
This is a legal process where you make a proposal a formal offer to your creditors to pay back a portion of what you owe in full settlement of all the outstanding debts. This amount can sometimes be as low as 30 cents on the dollar, for this you need the services of a proposal administrator licensed by the federal government like A.Farber & Partners.
Unlike a debt settlement or nonprofit credit counseling the proposal administrator has the legal power to protect you from your creditors and work with all their creditors as a group if the majority of the creditors accept your proposal then they are all legally bound by it this simplifies the process and you will not have to pay any fees or costs in addition to the agreed proposal payments because you may be less to settle your debts you have a better opportunity to rebuild for your future you will not have the burden have endless large monthly payments hoping that you will eventually pay off your debts.
Finally, if none of the above is suitable then bankruptcy is the last option.
Bankruptcy is a legal process that gives an honest but misfortunate debtor who cannot meet his or her financial commitments a fresh start this process is usually chosen when the debtor does not have the money to make a reasonable offer to his or her creditors and all other options have been exhausted. People in this situation usually have few if any assets like a car, RRSP’s or equity in a home and large most debt. As there is no realistic hope of paying these off bankruptcy allows you to eliminate all over tax and start a fresh.
In all of the above instances your credit score will be affected to a greater or lesser degree as you have not been able to keep up with repayments for more detailed understanding of consumer proposals and bankruptcy please see our Education videos on YouTube or on our website or take advantage of a free consultation with one of our debt solution managers who will review your situation and recommend a solution that will provide you with the debt relief that you require.
As professionals our commitment is to help you find the solution that’s best for you, for a free consultation call us today.
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