Let’s face it, being in debt is not fun. It affects you physically and emotionally. Getting debt relief is the solution. According to Equifax (a credit risk assessment company), many Canadians carry a whopping $22,000.00 of non-mortgage debt. Huge outstanding balances on credit cards and lines of credit are creating overwhelming anxiety for many Canadians leading them to seek debt assistance.
This situation happens, with rare exceptions, when people spend more than they earn. Many Canadians do not understand how interest rates on loans affect debt repayments. They think that by paying the minimum amount owing on the credit card carrying debt is fine.
However, let us examine this case scenario: Jim owes $2000.00 on his credit card and he only pays the minimum amount owing usually $25.00 monthly. Continuing to do so at 18% interest it would take him 15.6 years to pay off the $2000.00 accumulating over $3,332.00 in interest. Jim needs to get debt help. FAST!
Below are some details you may want to evaluate when you are investigating debt relief in Canada.
1. What is Debt Relief Canada?
Debt relief is a solution to help eliminate debt. There are many debt relief programs that help Canadians who are overwhelmed with the amount of money that they owe.
What is debt consolidation? It’s the first solution which is simply combining outstanding loans such as credit card debt or line of credit debt into one more manageable monthly payment hopefully negotiated at a lower interest rate. There are many companies who offer their expertise.
However, be prepared to do a lot of investigation and research to make sure you are dealing with a reputable firm. A second option to get debt help is to enlist the services of a company who will propose an informal arrangement to your creditors for you to pay back a portion of your debt. Be wary when going this route as many charge extremely high fees.
Consider consumer debt aid with something referred to as a consumer proposal. This is a legally binding settlement between you and your creditors and is probably the safest and least expensive way to pay your debt and rebuild your credit score. Personal bankruptcy should be the last option to consider for debt relief.
2. Are There Free Canada Government Grants to Pay Off Debt?
If you are hoping that debt assistance from free government grants is available there no such thing. When doing research on the internet or watching TV you will find many debt relief services who imply that they are affiliated with the Canadian Government. This is not true.
The truth is that many of these companies claiming Canada debt assistance merely means that they have been licensed by the Canadian government.
These licensed debt relief companies that offer consumer debt aid or debt reduction are regulated with what they can charge and what course of action they can take.
3. Are There Risks Involved with Using an Online Consumer Debt Aid Service?
While surfing the net looking for debt assistance you will come across many sites that offer consumer debt aid. Many of these companies suggest that they can negotiate on your behalf with your creditors and get you an awesome deal. Or they may use terms such as free Canadian government grants leading you to believe they are part of a government sponsored debt program.
As I mentioned above, the Canadian government does not endorse any service promising Canada debt assistance. If the services of these companies sound too good to be true, they are too good to be true.
Be very wary of divulging banking and credit card information to anyone, particularly third-party online services. Check the legitimacy of the debt reduction company by contacting the Better Business Bureau. Ask the company for their office address to go there and speak with a representative.
If the answer is no, run the other way! If the company offering consumer debt aid insists on you paying up front, run the other way. If the company promises you a quick fix to get rid of your debt, run the other way.
4. Can You Get Out of Debt on Your Own Without the Services of Canada Debt Assistance?
It is very possible that one can eliminate their debt on their own especially if the debt load is small. However, this takes a lot of self-discipline, research, and time. Review your own credit report and if there are errors dispute them with consumer credit bureaus.
Consider consolidating credit card debt from higher interest cards to lower ones. Be consistent and on time when paying down your debt.
Before making a purchase, ask yourself, “Do I really need this?” Chances are you don’t! If this is a daunting task for you then it is wise to approach a consumer debt aid company in Canada.
5. What Can I Expect When Approaching a Company Specializing in Consumer Debt Aid?
Once you have decided that you need help from an accredited Canadian debt relief company have all your paperwork and information ready.
They will require your personal financial situation, the amount of money that you owe to your creditors, your employment status, your assets etc. An advisor will discuss your options and recommend credit counseling. Be prepared to take responsibility for your financial situation.
Congratulations on reading this article to the end! This is your first step to becoming debt free.
However, remember that debt relief is not a magic wand. It will take hard work, discipline, and determination on your part to become financially stable. Recognize that this will not happen overnight.
Depending on how much you owe your creditors it could take several years. Just get started and there will be light at the end of the tunnel.