Burnaby, British Columbia, is beautiful and expensive. Although many residents enjoy a fantastic lifestyle, Burnaby is in the top nine percent of the world’s most expensive cities. The high cost of living can lead to using credit to pay for your needs.
Debt payments can quickly become unmanageable. Fortunately, if you have too much debt, there are ways to deal with it. If you’re looking for debt relief programs in Burnaby, debt consolidation is one of several options that can help you.
Debt Relief Programs in Burnaby
Having multiple debt payments can make life more complicated. Sometimes, this leads to constant borrowing to keep up with living expenses and credit payments. There are debt relief options to make your debt load more manageable – debt consolidation, credit counselling, debt settlement, a Consumer Proposal, or Bankruptcy.
Burnaby debt consolidation
In Burnaby, debt consolidation loans can be effective if you have too many payments at high interest rates. This type of loan combines unsecured debts into one lump sum with one payment. The interest rate is sometimes lower than on your other debts. You will pay off your loan within a certain period, often up to five years, if you make all your loan payments on time.
There are various ways you can consolidate your debt. These are some of the most common types of consolidation loans:
- Unsecured loans.
- Refinancing your mortgage.
- Setting up a Home Equity Line of Credit.
- Credit card balance transfers at low introductory rates.
A debt consolidation loan can help you get out of debt. However, you typically need to apply and qualify for this type of loan. As part of the application process, the lender usually checks your credit score and wants proof of income to ensure you can repay the loan. It can be challenging to qualify for a debt consolidation loan.
Two other things to be aware of are that these loans do not reduce the amount you owe, and you must still pay interest on the money you borrow to pay off your other debts. However, debt consolidation loans typically have a minimal effect on your credit rating.
Credit counselling can help you with budgeting and offer solutions for debt repayment. If you’re unsure whether consolidating your debt is a good idea or don’t think you’ll qualify for a loan, a credit counsellor can help you find the best option.
Licensed Insolvency Trustees (LITs) provide credit counselling and primarily offer two types of government-approved debt relief solutions: Consumer Proposals and Bankruptcy. Working with an LIT can reduce or eliminate your debt and give you legal protection from creditors.
There are also non-profit or for-profit credit counselling agencies that may help with budgeting and money management. If you choose a credit counselling agency, be sure to do your research. Some charge fees and any programs they offer to help resolve your debt situation won’t provide you protection from your creditors. They may refer you to an LIT if they can’t offer a solution that fits your needs.
Debt settlements are agreements negotiated with creditors to pay less than you owe, usually in return for a lump sum payment. Your creditors can agree to the offer or negotiate for a higher amount. They will then take the agreed upon amount and write off the remaining balance.
You can negotiate a debt settlement yourself or hire a private debt settlement company to negotiate for you. A debt settlement may work for you if you have the money available, but there are possible pitfalls to be aware of.
Getting your creditors to agree to a debt settlement can be difficult. Your creditors don’t have to accept a debt settlement offer. If they believe you can keep making your payments, they may not agree to settle for less than you owe.
Another issue with debt settlements is you need the money to pay the settlement if they accept your offer. When you’re struggling with too much debt, you might not have the funds to pay your creditors.
If you use a debt settlement company, there is no guarantee that they will successfully negotiate a settlement for you. If they are successful, a debt settlement can hurt your credit score. You may also have to pay high fees and have no legal protection from creditors. And, like a credit counselling agency, they may refer you to an LIT because they can’t solve your debt problems.
A Consumer Proposal is a government-approved debt management solution to help you deal with unsecured debt. Only a LIT can submit one on your behalf. A Consumer Proposal can reduce your debts by up to 80% and eliminate the interest your creditors charge. Additionally, you won’t have to give up any of your assets.
You’ll have one payment to cover the remaining amount that you make to your LIT. They then distribute the money to your creditors. You can have up to five years to pay it off.
Unlike other types of debt consolidation, a Consumer Proposal gives you legal protection from creditors. Once it’s filed, the collection calls, wage garnishments and legal action against you stop. Your LIt will work with you to ensure you have a payment you can manage.
If you file a Consumer Proposal, it does affect your credit score. It will show on your credit report for either six years after you sign the documents or three years after you pay it off, whichever comes first.
If debt consolidation is not an option that works for you, filing for Bankruptcy could provide debt relief. As with a Consumer Proposal, you’ll need an LIT to file for Bankruptcy. Bankruptcy will eliminate your unsecured debt, but you may have to surrender some of your assets. You must make payments to your LIT to cover the costs of filing. Filing for Bankruptcy will affect your credit for six years after you receive a Certificate of Discharge.
Burnaby Debt Consolidation Help
In Burnaby, debt consolidation options are available to provide you with debt relief. If you’re struggling with too much debt, too many payments, or high-interest rates, contact Allan Marshall and Associates today.
Our Licensed Insolvency Trustees are experts in debt solutions and will work with you to find the best way to deal with your debt. We offer credit counselling, Consumer Proposals, and Bankruptcy. Call us today for a free consultation at 1-888-371-8900. We can help you get rid of your debt and get you back to living your best life in Burnaby.