Do you have more debt than you can handle? It can be hard to find the right debt solution that can help you get out of debt. Many debt problems are easy to solve, others require professional debt help. Our advice is to deal with your debt and financial problems now, before they get out of hand.
The licensed insolvency trustees at Hoyes, Michalos & Associates are experts who can help you find the safest, best debt solution to deal with your debt problems and eliminate your debt.
5 Ontario Debt Options
At Hoyes, Michalos & Associates we understand the stress and negativity that overwhelming debts can cause. We also realize that everyone’s situation is unique, and as such, no one debt relief program is right for everyone. Thankfully, in Ontario, there are number of different debt management options.
We are happy to offer everyone a FREE, no obligation, professional consultation at any of our Ontario locations, in order to review these options with you. Let us help you to decide which debt relief solution will help you get out of debt once and for all.
- Debt Consolidation: A debt consolidation loan is one new loan issued to pay off multiple small loans. Combining smaller loans and bills into one easy to manage payment can help make debt repayment automatic and more affordable. Generally, debt consolidation loans offer a lower interest rate and payment can be spread out over a longer period of time. It can be a good credit card debt solution as long as it deals with all of your outstanding debts. The downside is that a debt consolidation option does not eliminate your debt, it just makes repayment more manageable. You will also need to apply and qualify in order to take advantage of this option.
- Credit Counselling: Credit counselling is when a non-profit credit counsellor summarizes your debts and prepares a multi-year repayment plan for you. A credit counsellor will offer a solution called a debt management plan or DMP which allows you to pay back your debts over a period of three to five years. Your credit counsellor presents this option to your creditors and, if accepted, you make one monthly payment to the credit counselling agency. A debt management program is not a form of debt cancellation or debt reduction. You will still have to pay off all of your debt, but sometimes the interest relief received is enough to allow you to solve your debt problems.
- Debt Settlement: A debt settlement solution is an informal arrangement made with your creditors to pay back a portion of your debt. However, this arrangement is not guaranteed and fees are required to complete the process. If you have a lump sum of money already available, you can try to negotiate a settlement with your creditors on your own however we do not recommend most debt settlement companies as a trusted debt solution. Many charge high fees to refer people to a licensed insolvency trustee to file a consumer proposal.
- Consumer Proposal: A consumer proposal is a legally binding settlement between you and your creditors to pay back a portion of your debts, over a period of up to five years. At the end of the proposal period your debts are discharged and you can begin to rebuild your credit score. A consumer proposal is often the safest and cheapest debt relief option when dealing with debt.
- Personal Bankruptcy: Bankruptcy is considered the last resort option when dealing with debt. In Canada, filing bankruptcy is a legal process regulated by the federal government. It offers the honest, but unfortunate debtor protection from creditors and a discharge of all debts at the end of the bankruptcy term.
Each of these alternatives has its own benefits and risks of debt relief. Talking to a licensed professional is the best way to ensure you choose the solution that fits your needs.
Dealing With Problem Debts
The best debt solution for you should solve all of your debt problems. Reducing interest through a debt consolidation loan is good, but not if it doesn’t ultimately eliminate your debt. Dealing with some credit card debt and outstanding bill payments is great, but not if you are left with large unpaid tax debts. And what if you have been unable to pay back your student loans even after years of trying?
One of the biggest advantages of a consumer proposal or bankruptcy over any other debt solution is that a solution through the Bankruptcy & Insolvency Act is the only solution that can deal with all of your unsecured debts including:
- Credit card debt;
- Tax debts such as income tax debt, HST, and source deductions;
- Car loan shortfalls;
- Outstanding bill payments;
- Government guaranteed student debt as long as you have been out of school for seven years; and
- Payday loans.
Do You Need Help? Debt Warning Signs
Whether you are dealing with credit card debt, tax debts, or student debt, being proactive and recognizing the warning signs that you are carrying too much debt can help you to make the decision to find a solution and reduce debt before it becomes a problem.
You have a debt problem, or are going to have one, if:
- You spend more money than you have coming in;
- You use credit cards as a necessity, rather than a convenience;
- You borrow money to make it from one payday to the next;
- Creditors are threatening to garnish your wages, sue you or repossess your car, furniture or house;
- You pay only the interest or monthly minimums on your credit card debt or line of credit;
- You’re receiving phone calls from collection agents hired to collect payment of your debt;
- Utility companies cut off service because your bills have gone unpaid.
If you have experienced any of these situations, then it is time to seek debt help from our licensed and experienced professionals.
Better Debt Solution Services
As you have now learned, bankruptcy is just one of the multiple Ontario debt management solutions. It should be used as a last resort, and it will only be recommended by a licensed insolvency trustee if none of the other debt relief alternatives can work. A licensed insolvency trustee can determine how to get out of debt in your specific situation.
Our clients feel the relief of getting out of debt at their very first meeting. Our Debt Free in 30 approach to reviewing your options will help you find better ways to manage your debt problems. We are confident that our friendly and understanding professionals can help you choose the correct debt solution for your individual situation.
Contact us today and get a FREE, no obligation consultation. We can help to start you on the road to a more secure financial future, debt free.