Your Path to Debt Freedom
Debt can place a significant strain on anyone attempting to manage it, particularly when faced with unexpected situations that disrupt finances further. Unfortunately, small-scale money difficulties can rapidly spiral out of control, to a point where debt is completely unmanageable.
Luckily, there are effective ways of dealing with debt. At Spergel, we have the knowledge and experience to provide reliable advice on how you can move forward, free from debt. Falling into financial difficulty is nothing to be ashamed of, and it should not preclude anyone from seeking help.
If you find yourself unable to make monthly repayments on your outstanding balances, a solution such as debt consolidation or a consumer proposal may be right for you. We are here to help you understand all of your options.
What is Debt Consolidation?
Debt consolidation is a method which utilizes a loan to help you repay your existing creditors. Instead of managing several repayments to various creditors, debt consolidation allows you to pay off all of your existing arrears in one hit, and replace multiple outgoings with a single monthly payment. The loan can be either a traditional bank loan, a second mortgage, or a line of credit. Each option has its own benefits and risks.
Depending on the interest rate and other variables, debt consolidation can make a significant improvement in the affordability of your repayments. Instead of accruing interest and charges across several accounts, you will have just one loan remaining, and pay interest on that loan only.
Am I eligible for Debt Consolidation?
Applying for a debt consolidation loan usually involves a number of strict conditions. Firstly, you will need to prove to a lender that you have the means to make your monthly repayments to them. They will ask for details of your income, any additional outgoings or dependencies, and a monthly budget, which demonstrates your ability to successfully take on the responsibility of a loan.
Some lenders require you to nominate a co-signer. It may be difficult to find someone who is willing to risk their financial standing and personal wealth, in the event that you are unable to make repayments. Lenders might also request that loans are secured against your assets; consider whether this option is appropriate to your individual circumstances, and the potential impact that repossession of assets might have.
Are consumer proposals a viable alternative?
A consumer proposal is an offer which is made to your creditors, with the goal of either reducing the total amount paid, extending the repayment period, or both. The key is to create a repayment schedule that you can afford, and our Licensed Insolvency Trustees will help you to do precisely that. If more than half of your creditors accept the offer, it becomes binding for all notified creditors. Most will usually accept a reasonable offer, as it results in a more favourable outcome than the bankruptcy of their debtors.
If you are living with financial difficulties, a consumer proposal is a worthy alternative to debt consolidation. Interest will stop accruing, your payments will be smaller and more affordable, and you will have a clear route to a life without your debt.
How can Spergel help
If you are considering debt consolidation in Toronto, contact our compassionate and expert team, who will help you explore your options. We will answer all of your questions and ensure that you are empowered with comprehensive knowledge of each alternative. If you decide to pursue a consumer proposal, our Licensed Insolvency Trustees will be able to support you throughout the entire process. Call us today to arrange a free consultation.