Debt Consolidation

What is debt consolidation?

Debt Settlement/consolidation for bankruptcy is available. You can obtain a loan that allows you to repay many other debts. For example, if you have three credit cards, you may be able to get a debt consolidation loan to pay off the credit cards, so that you only have one payment instead of three each month.

What are the advantages of a debt consolidation loan?

The advantages of a debt consolidation loan are:

  • You replace many payments each month with only one payment, which should make it easier to Budget your cash each month.
  • Your debt consolidation loan may have a lower interest rate than the rate you are paying on credit cards, so the loan should reduce your interest payments.
  • With lower interest rates and/or extended terms, you may be able to reduce your total monthly payments.

Do I qualify for a debt consolidation loan?

To qualify for a debt consolidation loan in Hamilton Ontario you must meet the following:

  • The bank will require a copy of your monthly Budget to determine if you can meet your loan payments.
  • You must be working, or have a source of income to allow you to repay the loan.
  • You may require a co-signor or collateral (such as a car or a house).

What if you don’t qualify for a debt consolidation loan?

There are many debt consolidation companies across Canada that offer to ‘consolidate your debt’ into one easy monthly payment and even suggest they will settle your debt for less than you owe.  Before choosing one of these providers you should beware of debt consolidation loan scams and research the debt consolidation company carefully.

A better option if you do not qualify for a debt consolidation loan may be a consumer proposal.  Under a legally binding consumer proposal, administered by a federally licensed Trustee in Bankruptcy, you can settle your debts for less than you owe under the only arrangement that is administered under the Canadian Bankruptcy & Insolvency Act.

If you are looking for help in dealing with you debt, contact us in Hamilton for a free, no-charge consultation.  We would be happy to talk to you about debt consolidation and all your bankruptcy alternatives.

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