The back to school season is officially here and that means kids are headed back to the classroom and parents finally get a little break from the boredom or mayhem that can come with summer holidays. That being said, September leads the way for another three to four months of expenses: back to school, Thanksgiving, Halloween, and yes, the holiday season. This can be exciting – or it can be stressful if you are still struggling with credit card debt left over from last year’s holiday season.
If you are heading into another busy family and holiday season and you are loaded in debt, it may be time to make some changes rather than racking up even more debt.
Sometimes a fresh start is the answer.
A debt consolidation is one way to find some relief from debt that has become overwhelming. Taking numerous debts and combining them into one manageable monthly payment can really reduce the stress and free up some much-needed liquid cash, especially at this time of year.
A debt consolidation usually takes the form of a loan from a bank or other lender – perhaps a personal loan, a line of credit, or even a second mortgage. You then use this loan to pay off all debts. This often results in a reduction of the total amount of interest paid, typically a lower rate of interest compared to your credit cards, and one monthly payment.
That being said, in order to qualify for a debt consolidation of this nature, you will need good credit. Additionally, once you’ve rolled all of your debts into the loan, that monthly payment may be more than you’re comfortable with.
If this has you concerned, you may want to think about a consumer proposal as a possible debt consolidation alternative.
A consumer proposal is a formal proposal put forth to your creditors offering an amount to settle your debts. Typically, this amount is much less than what you currently owe, but it is attractive to creditors because it is more than they would receive if you chose to file for bankruptcy. Once it has been accepted by the majority of your creditors, the result is a monthly payment that you can actually afford – and interest stops!
A consumer proposal in Ontario must be administered by a Licensed Insolvency Trustee, one who is regulated by the Superintendent of Bankruptcy, so you know that you will be protected and treated fairly in the process.
Want to find out more about the benefits of a debt consolidation or consumer proposal? Spergel is here for you.
Get in touch with us today to schedule a free consultation: 310-4321.