Debt Consolidation

What is Debt Consolidation?

Depending on your debt amounts and overall financial health, you may consider debt consolidation. There are several reasons why people in Manitoba may require the debt relief that consolidation loans provide. Many people struggle with money management; taking on too many loans and spending too much money can lead to issues with debt. When considering all the options to assist you in dealing with your debt, a Licensed Insolvency Trustee in Manitoba will discuss the option of taking out a debt consolidation loan. While trustees don’t offer this service themselves, they can provide credible connections that do. A debt consolidation loan can be obtained to pay off any small debts you might have. Using a consolidation loan makes it easier since there is only one payment, and you may find that you qualify for a better interest rate.

A consolidation loan can compress your debt payments into one affordable loan, but it may not completely get rid of your debts. You may find that a debt consolidation loan doesn’t make much sense to you long-term, as it can potentially put you in further financial jeopardy if you can’t make the payments. Luckily, there are other ways to consolidate debts that our Licenced Insolvency Trustee and dedicated team of financial professionals can provide, such as a consumer proposal or bankruptcy. See the other services we offer.

Is Debt Consolidation My Only Option?

Debt consolidation may not be a viable option for you, but there are other options that you can turn to:

  • Consumer Proposal: Your debts may be consolidated into more affordable monthly payments, allowing more flexibility and designed to meet your unique needs. A proposal allows negotiation of a reduced total debt balance with your creditors and allows you to make monthly payments on the remaining portion for up to five years. A consumer proposal makes more sense than a debt consolidation loan if you’re unable to pay back the entire debt balance, plus interest. During a consumer proposal, you do not lose any assets. Once a consumer proposal has been filed, you will be protected against any collection efforts from your creditors.
  • Bankruptcy: Filing for bankruptcy will show on your credit history for 6 years following your discharge from the process, but can be completed in as little as 9 months. A consolidation loan can prolong your debt, and you may be asked to pledge your assets as security. If you then have trouble paying the consolidation loan, you risk losing any assets pledged against the loan. If it doesn’t seem like a consolidation loan makes sense for you, then bankruptcy is a good opportunity for a restart. The word “bankruptcy” may seem like a bad thing, but there can be financial benefits if you choose this path. Filing a bankruptcy can provide immediate debt relief, as well as freeze principal and interest payments, all while stopping harassing phone calls from creditors. Bankruptcy may also cost you less than a debt consolidation loan.

No matter how hard struggling with finances can be, there are always options to assist you. Don’t take on those debts alone. Make an appointment for a free consultation today and see if debt consolidation is right for you.