Finding the Right Debt Relief Solution to Save Money and Avoid Bankruptcy

Canadians are struggling financially. If you’re feeling the pinch of rising inflation, increasingly out-of-reach housing costs, and persistently high interest rates, you’re not the only one. Trying to climb out of debt can feel impossible in an economy like this one.

Getting out of debt may not be something that you can do on your own, but that doesn’t mean it’s impossible. There are debt relief solutions that can help you finally deal with credit card bills, payday loans, bank loans, tax debts, and overdue bills, and they don’t have to involve bankruptcy.

Talk to a Licensed Insolvency Trustee

One of the first steps you can take to deal with overwhelming debt is to talk to a Licensed Insolvency Trustee. Trustee firms like Bankruptcy Canada provide free consultations, where a Licensed Insolvency Trustee will help you evaluate your finances and explain the pros and cons of different debt solutions. 

When you work with Bankruptcy Canada, they show you your different options, how much you will likely have to pay with each solution, and which one is right for your situation. They’ll also walk you through the implications of different debt relief solutions on your credit score and how long it will take you to pay off the debt.

Options for Debt Relief

Credit Counselling

A credit counsellor can provide you with a comprehensive overview of your financial situation, create a budget that you can follow, and help you accomplish your financial goals. Credit counselling is a great option for understanding your debt and charting a path toward debt freedom. It may be worth trying if getting out of debt is financially possible, but you’ve been feeling overwhelmed or stuck in a rut.

Debt Consolidation

Debt consolidation can be a great tool for saving money while still paying off debt on your own. If you’re carrying multiple high-interest loans, debt consolidation can simplify your efforts to pay it back and reduce the total cost generated by interest.

With debt consolidation, you combine your debts into a single monthly payment. A good consolidation loan or plan will also have a lower interest rate than your existing debts.

Debt Settlement

With debt settlement, you work with an organization that can help you negotiate with your creditors on your behalf. Typically, debt settlement involves offering your creditors a lump sum payment to pay a portion of your total debts while the rest is forgiven.

There are several factors to consider when you sign up for debt settlement, including the fees charged by the company offering debt settlement services and the likelihood that your creditors will be willing to negotiate.

Consumer Proposals

One of the tools available to you if you’re facing more debt than you can afford to pay back is a consumer proposal. This regulated insolvency proceeding can discharge a large portion of your unsecured debts. You will still have to repay some of it, but you do this through a single monthly payment.

A Licensed Insolvency Trustee helps you find an amount that you can afford to pay after reviewing your finances, and they calculate your proposal based on this. Unlike debt settlement, a consumer proposal offers greater protection. For example, if the majority of your creditors accept the consumer proposal, all of them must adhere to it. When you opt for debt settlement, the process is entirely voluntary and on a case-by-case basis with each creditor.

Debt relief is out there, and you don’t have to struggle with debt alone. Talk to a Licensed Insolvency Trustee about your options for getting out of debt today.