Debt Consolidation Toronto Can Help You Get Better Control of Debt

Toronto is a very expensive city to live in and many residents find themselves getting
overwhelmed by many debts from sources such as credit cards and payday lenders in
order to cope with living expenses. In many cases, debt consolidation Toronto can help
a great deal in making debts easier to manage and control.

Debt consolidation is one type of debt relief solution that allows you to combine all your
smaller debts and pay it using one loan that you get at a much lower interest rate. By
paying up all the smaller loans, you get rid of several debts that have different interest
charges and all  there is left to look out for is one monthly payment towards the new loan.

The primary aim you want to achieve when consolidating debt are the following:

1. To lower the interest rate,
2. Make the debt easier to manage by making only one monthly payment to
one creditor,
3. Pay out multiple debts in full with no negative consequences to your credit.

If you don’t achieve all three objectives, it can be a financial nightmare in the end.

Lowering the interest rate is one key factor to make this debt solution effective. If you
can’t find a loan that will reduce what you are currently paying on interest rates, then it
does not make sense to consolidate at all. Simply do the math to make sure that you
are actually paying a lesser amount in interest rates. Calculate the interest rates on all
your debts, including credit cards, payday loans and other unsecured loans you have,
and figure out how long it would take you to pay off these debts at your current payment
rate. Even if you get a loan with easy payment terms, but end up paying higher interest
rate because of the longer term, you will only be paying more debt in the long haul. This
totally defeats the purpose of consolidating. If it’s not possible to reduce your interest
rates, you certainly should reconsider this option. Many lenders can offer you a loan with
a low interest rate if you have a good credit score. If you do not meet the credit score
requirement, you have to work at improving your credit behavior first in order to bring
it up to standard.

Finding a consolidation loan with easier repayment terms is another critical factor to
make this debt solution work. It really does not matter if you choose a loan with a shorter
or longer repayment plan. What matters is that the loan provides the best terms in such
a way that it can help you pay off all the debts that you owe in a way that is easier for you
to manage without adding more to your debts. In some cases, a shorter payment period
will be the best option because if you pay off the debt quicker you will end up paying lesser
in interest charges. There are some cases as well where a longer repayment plan will be
more helpful in allowing you to pay up your debts at an amount you can afford every month
until you can get back on track financially. The longer time, however, might add up interest
charges, so again do the math to see if it will cost you more than if you just paid your debts
at a shorter time.

Take into account all these factors to help you figure out if debt consolidation Toronto may
be a good decision for you. If these factors are equally applicable to your financial
circumstances, it is possible to manage your debts successfully through consolidating.

The Problem with Debt Consultants and Their Advice

Debt Consultants

Debt Consultants in Toronto are plentiful and advertise themselves very well in various ways. Their ads can be seen and heard in radio broadcasts, newspaper publications and even online. They can be really persuasive and know what to say to convince you that they can greatly reduce your debt. They’ll even say that you don’t need to file for bankruptcy to get out of debt. While all of this is a wonderful and pleasing proposition, just how true are their claims regarding the matter? Is their truth in a debt expert’s statement when they say it is possible get out of debt without the need for bankruptcy?

The answer is yes. There are a few ways to get out of crippling debt. One of the ideal ways to do this is by filing a consumer proposal. This is where an administrator, licensed by the Canadian government, will work with the person with debt and their creditors to reach a settlement. If both parties agree, then the creditors will no longer chase after the debtor and the debt to be paid is reduced significantly. It’s important to remember that ordinary debt specialists are not authorized by the government to handle consumer proposals. Only a Trustee in Bankruptcy can offer legal consumer proposals as well as provide a comprehensive assessment of your debt problem, provide possible solutions and even explain all the consequences of each and every solution.

A consumer proposal is not exactly the best option for everyone with debt. It all depends upon each and every person’s debt situation and after an in-depth financial analysis of a bankruptcy trustee.

On the other hand, what commonly happens is that some debt experts will recommend filing a consumer proposal, charge you upfront for their consultation time, and then simply tell the debtor to approach a bankruptcy trustee as they are not authorized to file it for you. It’s also unlikely that they will let you know of each and every possible solution for your case. Some of these debt experts are also known for scamming some of their clients. From being deceptive about being a non-profit organization, to offering debt consolidation loans when it’s actually a debt settlement program, a person needs to be really careful and do some research before setting up an appointment.

That being said, not all debt consultants will steer you into a decision that will only benefit them. Many do give good and solid advice when it comes to help you manage and reduce your debt. However, many of them are just not in the right position to fully assist you from assessing your debt situation, choosing the right the solution and executing said solution. In most cases, a trustee in bankruptcy is the best person or organization to approach as they are overseen and recognized by the federal government and the courts, ensuring you only get the best advice and information.

No matter what path you take, whether it is with a debt consultant or a bankruptcy trustee, the important thing is that you are taking steps to end your debt problems once and for all.