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debt relief
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high interest credit cards
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mortgage payments
Debt Relief Canada
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Debt Relief Canada

How to get out of debt in Canada? Debt levels have soared in the last 10 years and more Canadians than ever are stressed out and needing help.

What are your options for getting out of debt quickly and how do you get out of debt?

Where is debt help available in Canada?

Read the following carefully as the information will relieve your stress and help you see a future without debt. Your biggest enemies are fear and ignorance.

OPTIONS FOR DEBT

Pay the Debt in Full or Negotiate Debt

Pay Debt In Full:

Sell Personal Assets: Considering selling that second car or boat to pay off your debts or the expensive jewellery that you never wear and use the proceeds to pay off your creditors.

Consolidation Loan: Apply to the bank for a low interest loan to pay off the high interest credit cards. This will immediately improve your cash flow and ease the stress. Banks will require you to have a good credit rating or may require a co-signer or security for the loan.

Release Equity from Your Home: If you have equity in your home then you may want to speak to a mortgage broker regarding a re- mortgage to release additional money to pay off your debts. With mortgage interest rates at an all time low it is almost certain that your new mortgage payments will be at least half of those you are presently making for credits cards and lines of credit etc.

Borrow Money from family and Friends: Only borrow money from family and friends if they are comfortably able to lend you the money. There is no point borrowing money from someone if that person`s quality of life suffers as a result.

Negotiate the Debt:

If you are too far under then consider reducing the amount owing or the interest rates rather than struggling with payments each month which you can ill afford:

Credit Counselling: Credit Counsellors will usually negotiate the interest rates on credit cards and arrange for the debts to be paid off over a 4 year period. The debts are usually paid in full but your credit still takes the hit because the interest rate was negotiated. One thing most people do not know is that the creditors are funded by the creditors.

Informal Settlement: In this case you or a trained consultant may negotiate the debts with your creditors and agree on a lump sum payment for a reduced amount as full and final settlement of the debt. You will need to have the money saved away in your bank as the creditor usually wants paid within 30 days of the agreement being struck.

Consumer Proposal: This is a formal procedure where the debtor (the person in debt) offers to pay an interest free payment over a period of up to 5 years as full and final and settlement of the full debt. In a consumer proposal the creditors will often agree to accept less than the amount owed if your case is presented well. When a consumer proposal is filed you are protected from legal action by the creditors, the interest is no longer applied to your debts, all your assets are protected and the creditors are not allowed to contact you any more.

Bankruptcy: This is very often considered to be the very last resort but if you have minimal assets and you are on a low income income then bankruptcy may be the way to go. Not all your asstes are seized in a bankruptcy as some are exempt. Also your credit is not ruined forever and may be rebuilt after a number of years.

What Now?

Take action and seek help as the longer you leave the debts the more interest you will pay each month and the stress will continue

You may successfully negotiate debts yourself if you have the time and inclination. Alternatively most reputable consultants will offer a free consultation to explain all your options in detail and negotiate your debts for you if this is the best alternative. Free professional help and advice is available so make sure you use it before moving forward.


Street Talk

AJ  

Very good advice here and much of it will apply to US citizens as well.

Reply
  about 1 decade ago
  

Does USA have options similar to the consumer proposal?

Reply
  about 9 years ago

Paul, My article applies to the U.S. , Canada, selected countries in Western Europe and Australia. Let me know what you think. Regards, Daniel

Reply
  about 1 decade ago

Thank you for explaining some of the options. People in the U.S.A. often have debt problems also. We probably have similar options here in the U.S.

Reply
  about 1 decade ago

Hi Sarah, My article explains the two biggest and most expensive problems in the U.S., applies to Canada, selected European nations and Australia. Read part 1 and II, then let me know what you think. Regards, Daniel

Reply
  about 1 decade ago
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