30 Apr What are the debt relief options?
debt relief options
Despite the much you grind to make ends meet, you have to keep up with your loan bills. Failure to this could land you a wage garnishment from your creditor giving you more stressful days than you already have. A wage garnishment means your creditors direct your employer to transfer of part of your salary to them, as a way of repaying the debt you owe. Sadly, this takes place even before you can personally get to receive your salary.
As difficult as this situation may seem, we are here to calm your worries by offering factual options that guarantee cessation of your wage garnishment while still ensuring that you are dealing with your debts.
Below are important wage garnishment facts and how consumer proposals or bankruptcy (in certain situations), will stop wage garnishments.
Types of debt cancellation options
For most people, seeking professional help comes after trying to DIY. At York Credit, we have free DIY financial tools that will assist you to understand the financial situation you are in first.
Budgeting worksheet: This tool enables you to create your household budget. It is very helpful as it will help you realize the percentage of income that goes to expenses. Furthermore, such a worksheet will clearly show you how much you can set aside for debt repayment or savings.
Debt calculator: It is very useful as it will stop you from spinning in circles as you try to organize your debt. Using a debt calculator will enable you to estimate the debt repayment period. Knowing how long it will take you to be debt free will definitely give you a peace of mind as you work out your options.
Debt options calculator: This helps you figure out the monthly cost of the debt solution you will choose. It is advisable that you use this after creating a budget.
In this category, we shall look at debt relief Toronto options that will enable you to control debt since some debt situations dictate that you get more help than self-help methods and budgeting. Formal solutions include:
Debt consolidation loan: A debt consolidation loan enables you to pay back multiple loans via one payment having a lower interest rate. In other words, if you have three credit cards each having a debt that you should repay with an interest rate of 18%, you can combine the three in a new credit card that has an 11% interest rate on the consolidated debts. A consolidation loan quickens your debt payment by allowing more funds to go into repaying what you owe instead of the interest rate. Everyone qualifies for a debt consolidation loan except those with an impaired credit score.
Debt management plan: This is a proposal to your creditors by the credit counsel agency. With this method, your credit counselor enters into negotiations with your creditors to get you reduced interests on the debts. You are then required to pay 100% of the debts owed in monthly installments but at a lower interest rate. The counsel agency distributes the payments to your creditors.
Debt settlement plan: For this approach, financial settlement companies try to negotiate a lower debt than what you owe, with your creditors. This can succeed or fail depending on the kind of creditors you owe. Once you sign a contract with the settlement company, you start paying installments to a holding account that finally adds up to reach the sum agreed between the firm and your creditors. During this period, you stop further principal or interest payments to your loaners, a strategy used as a negotiating tactic by the settlement company.
Consumer proposal: Undertaken only by a Court Officer or a LIT (Licensed Insolvency Trustee), a consumer proposal asks your creditors to allow you to repay part of the debt and not the full amount. Furthermore, it stops liens on your property, wage garnishment, harassing phone calls, or any other legal action filed against you. Read more about consumer proposals Toronto at yorkcreditservices.com
Above are some of the methods that you can utilize to manage debt. Remember, you can also file for bankruptcy, which will release you from all debts while protecting you from legal actions. Visit York Credit for further help with debt relief options.