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Debt Consolidation in Red Deer

If you are struggling to make payments on multiple forms of credit, you may be looking at consolidating your debt to help you manage your finances. Perhaps you’re unable to make your minimum repayments each month, or your debt is taking its toll on your mental wellbeing. 

Whatever your circumstances, a Licensed Insolvency Trustee (LIT) can offer you professional support to help you clear your debt and get your finances back on track. With the support of an LIT, you can decide on the best course of action to manage your debt and work towards a brighter future.

What is debt consolidation?

In simple terms, debt consolidation is the process of combining two or more debts into one monthly payment. Debt consolidation in Red Deer usually involves taking out a new loan to pay off several smaller loans. By doing this, you’re effectively combining all your individual debts into one payment, which is known as “consolidating” them.

Debt consolidation is a common choice if you’re looking to manage your debt as it can help to simplify your finances, ease stress and potentially save you money by reducing the amount of interest you’re paying on several loans.  Consolidation however, is not always your best choice, which is why talking to an advisor can help.

Talking to a Licensed Insolvency Trustee about debt consolidation in Red Deer

If you’re finding it difficult to see a way out of debt, consulting with an LIT can take some pressure off. They are the only federally-regulated debt advisors in Canada, licensed by the Office of the Superintendent of Bankruptcy. Trustees offer debt advice and support to help you manage your debt. They can also deal with your creditors on your behalf.

Licensed Insolvency Trustees can offer you unbiased advice that’s suited to your personal situation and help you to assess all options available to you. From there, you can decide if taking out a debt consolidation loan would suit you, or whether there may be a better option to suit your unique financial circumstances. 

Is a debt consolidation loan right for me?

Consolidating your debt with a new loan can help you to manage your repayments – usually making only one monthly payment.  If you’re unsure whether a debt consolidation loan is right for you, here are some factors to bear in mind:

  • The loan amount: For a debt consolidation loan to be effective, your new loan needs to be large enough to pay off all your unsecured, high-interest debts.
  • Collateral: Some debt consolidation loans will ask that you give a form of collateral. This may mean that your loan is secured to a valuable asset, like your home or your car. The risk being that if you find yourself unable to make your loan payments, you may lose your valuable asset.
  • Interest rates: You’ll need to make sure that your new loan has a lower interest rate than the average interest you’re currently paying on your debts.

Alternatives to a debt consolidation loan

While a debt consolidation loan can make your debt repayments more manageable, you will still be paying off the full amount of your debt. Discussing your situation with an LIT can help you to decide on the best form of debt management for you.

Here are some alternatives to a debt consolidation loan to consider:

Consumer Proposal

A Consumer Proposal works similarly to debt consolidation and involves your LIT arranging a settlement agreement with your creditors by combining your debts into one single monthly payment. You’ll then pay a monthly payment over a certain time period no longer than five years.

Provided your creditors accept the proposal and you are eligible, your LIT may be able to put a settlement arrangement together that is more affordable for you. You then may end up repaying less than the amount you initially owed, stretch the full amount over a longer period or have your interest rate reduced.

Credit counselling

Credit counselling in Red Deer can be a great way for you to learn about money management and give your financial wellbeing a boost. LITs are also licensed credit counsellors who can offer you guidance on your spending, help you keep track of your debt repayments and put long-lasting financial habits into place. With their help, you may be able to get your finances back on track and avoid becoming insolvent. 

Your Trustee can also contact your creditors on your behalf and ask if they will reduce or eliminate the interest on your debt. Some creditors may also be willing to extend the timeframe you need to pay your debt by.

Personal Bankruptcy

Filing for Bankruptcy does not have the stigma it used to. There are certain advantages for you to consider. Once you’ve filed for Bankruptcy, your creditors will stop any wage garnishment and will no longer be able to call you to ask for debt repayments. When you’re discharged, your current state will be completely debt-free. 

The only way for you to file for Personal Bankruptcy in Canada is through a Licensed Insolvency Trustee. Before you make any decisions, they can offer you professional advice on the best route to take for your financial situation.

Ready for a financial fresh start?

At Allan Marshall & Associates, we have helped people with their unmanageable debt since 1979. Reach out and make an appointment to speak with one of our Licensed Insolvency Trustees in Red Deer.  Together, we can put together a plan of action to manage your debt and gain the fresh start that you deserve. Contact us today for a free consultation. We can help™