If you have a few small loans to take care of, getting a debt consolidation loan could be a great option for you. This loan combines your smaller debt payments and bills into one, easy manageable payment, and generally offers a lower interest rate.
Credit counselling is set up with a non-profit counsellor who’ll help summarize your debts and prepare a yearly repayment plan for you. When you go through a non-profit credit counsellor, they’ll offer a Debt Management Plan (DMP). In a DMP you pay back debts in full over a timeline of 3 to 5 years. Once the plan is established, your credit counsellor presents this option to your creditors and if they accept, you’ll simply make one monthly payment to your credit counselling agency. We can help you in choosing the right non-profit credit counselling agency to work with.
This option is a legally binding settlement between you and your creditors that allows you to pay back a portion of your debts over a period of up to 5 years. At the end of your consumer proposal period, your debts are cleared and you can start rebuilding your credit score. Consumer proposals are considered one of the safest and most affordable options for debt relief and is an excellent option when you want to avoid filing for bankruptcy.
Filing for bankruptcy is a process regulated by the federal government, where, at the end of your term, you are discharged from your debts. However, claiming personal bankruptcy is considered a last-resort option and before starting the legal procedure of bankruptcy, it’s important to learn all the facts, for example, how much it will cost and how long it will last. Meeting with a Licensed Insolvency Trustee, such as Chande & Company, will help decide the right debt relief solution for you.
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