If you take on too much debt, it could harm your credit, make it difficult for you to get a mortgage or car loan, and even put your ability to afford food and housing in jeopardy. Even though your debt feels unmanageable right now, the good news is that it is possible to get out of it.

Budgeting, reducing spending, debt settlement, credit counselling, and consumer proposals are just a few of the ways to get out of debt. Your financial situation can be significantly improved by selecting the appropriate strategy.

When to seek debt relief

A high debt-to-income ratio, which is 43% or higher, shows that a substantial proportion of your monthly income is going toward paying off debts. However, there are even clearer signs that you are in serious debt and may need to seek assistance, they include:

  • You can only afford to pay the bare minimum toward your credit card debt.
  • You struggle to make timely payments on your bills.
  • You are getting calls from collection agencies or notices that a payment is past due.
  • You rely on credit to make ends meet.
  • You experience daily stress or anxiety due to your debt.

How to Get Rid of Debt in Canada

The best debt solution option for you will rely heavily on your unique situation. Here are a few solutions of what is offered.

Debt consolidation

Debt consolidation can combine several different unsecured debts, like credit cards or payday loans, into one loan so that you only have to make one payment each month. If you own a home, you may be able to consolidate your debt using your home equity. The idea is the same regardless of the approach you take: you obtain a new loan for the sum of all of your outstanding debts combined, and use the loan to settle those debts. All that’s left is for you to make payments on one loan, usually at a lower interest rate than you were paying on all of your individual debts.

Consult a debt expert

Consider consulting a debt expert if you want to learn how to manage your debt and  choose the best debt repayment plan for you. Helping you by reducing your debt and stopping all interest immediately.  You can rely on our experts at EmpireOne Credit to get the best debt expert advice, working for you, not your creditors.

Debt settlement

Debt settlement is the process of bargaining with your creditors to forgive some or all of your debt in exchange for a one-time payment, typically less than the total amount you owe. In Canada, a debt settlement business typically oversees this process.

Although creditors are not obligated to cooperate with debt settlement firms, in the event that a deal is reached, you will be required to pay the settlement firm the agreed-upon sum in one lump sum. When selecting a debt settlement firm, carefully review any contracts and look into any customer complaints the business may have received.

Consumer proposal

Consumer proposals can reduce your debt and stop all interest. A debt expert can help you during this process. A licensed Trustee files the proposal with the courts. It’s a legal agreement backed by the Bankruptcy and Insolvency Act of Canada.

You get to keep your assets even though a consumer proposal sharply lowers your credit. Additionally, the payments are dispersed over five years and are interest-free. A consumer proposal cost is based on your income, assets and the debt you owe. If you comply with the terms of the agreement, a consumer proposal will halt any legal action taken against you.

Bankruptcy

A legal procedure called bankruptcy allows you to declare that you are unable to pay back your unsecured debts and releases you from that obligation. A licensed Trustee filed the bankruptcy with the courts.  You will need to disclose and surrender non-exempt assets, give up your credit cards, attend credit counselling, and fulfill other requirements, such as monthly budgets. Your credit score will be negatively impacted by bankruptcy, which could stay on your credit report for up to seven years.

Conclusion

Getting rid of your debts is possible. You don’t have to keep managing the headache and stress that comes with the burden of debts. We have professionals and trained debt experts at EmpireOne Credit, we are here for you so you can experience peace and serenity once again. We offer a free and friendly consultation, so you need not worry about being judged, we understand. Contact us today to schedule a free appointment!