A financial crisis might happen to anyone. You can find yourself trapped in unmanageable debt as a result of a sudden job loss, income reduction, health problems, or marital breakdown. As a result of high debt loads, your life can turn into a never ending cycle of missed payments, collection calls, and the constant anxiety of how to make ends meet.
When you have several debts it might be a good idea to merge them all into one to help you reduce the interest being paid. Most credit cards usually charge interest rates ranging from 11.9% to 24.99%. The term “debt consolidation” includes a wide range of options.
Below, we will describe 2 different ways you can consolidate your debt:
Debt Consolidation Loans
A debt consolidation loan is a single loan from a bank or a private lender that will allow you to pay off your total debts (credit cards, payday loans, etc.) at once. You will then have to repay the lender 100% of the debts paid, plus interest, and fees.
Eligibility for the loan usually includes having an acceptable credit rating, stable income, and you must be able to demonstrate that you have the capacity to make regular repayments on your outstanding balance, while considering your living expenses. Some banks and private lenders require a co-signer or security (collateral) such as your home for the loan.
Missing payments may lead you to lose your home. Interest rates are lower than credit card loans, and usually range from 6.0% to 10.0%. With high interest rates and fees, a debt consolidation loan can still cost you a considerable amount that may not fit your budget.
A Consumer proposal is another option to consolidate your debt into one monthly payment; without any interest charges. It is a legally binding agreement between you and your creditors. Over a 5 year period (or less) you pay only a portion of your original debt owed (usually 25-30%) The amount to be paid back to your creditors is a reasonable amount that is suitable to your financial situation. Once your proposal is accepted by the majority of the creditors (by dollar value), all other creditors are legally obligated to accept the proposal.
As soon as you file a Consumer proposal all interest charges, collection calls, wage garnishments, and any legal actions will stop. A Consumer proposal can only be handled by a Licensed Insolvency Trustee, who will negotiate with your creditors on your behalf and its fees are included in your monthly payment. A Consumer proposal is a great debt relief option which allows you to have a fresh financial start with payments that suit your budget and allow you to keep your home, car, and other assets that are important to you.
Below is an example of your monthly payments and total amount you would be paying to pay:
Filing a Consumer Proposal will save you time, money, and provide you peace of mind.
Take the first step and contact Sheriff Sole & Madej Inc. to learn more about the options available to you to consolidate your debt. Call us at 1-844-482-3328 to book a free confidential consultation. We offer services in Toronto, Mid-town Toronto, North York, Markham, Vaughan, Pickering, Mississauga, Brampton in seven different languages.