Your Path to Debt Freedom
Finding oneself in financial difficulty is an incredibly stressful experience. A couple of missed payments can quickly intensify into unmanageable debt, often compounded by unanticipated expenses. It may seem as if there is no way out; fortunately, there are a number of effective measures you can take to free yourself from the burden of endless debt.
At Spergel, we specialize in debt management techniques such as consumer proposals. You may also have heard of debt consolidation. We will help you to understand the difference, and if you choose to pursue a consumer proposal, support you in reducing your debt.
What is Debt Consolidation?
Debt consolidation is a process that involves taking out a loan, with which existing creditors are paid off in full. Debt consolidation can be achieved with a line of credit, a second mortgage, or a line of credit.
The key benefit of this approach is that existing debts are settled immediately, and no further charges, penalties, or interest payments are accrued. Instead, debt repayment is simplified and streamlined to just one monthly payment to the lender.
Is Debt Consolidation the right option for everyone?
Debt consolidation might appear to be the perfect solution; however, it does come with some significant caveats. Firstly, not everyone will be able to secure the loan they need to consolidate their debts. Lenders are always looking to mitigate their risk, and they are not in the business of handing out loans on a philanthropic basis.
You will be required to prove that you are in the financial position to repay the loan in full; most lenders will not approve a loan unless you have a salaried income, and you will need to provide a monthly budget which demonstrates your ability to manage loan repayments in the context of your usual outgoings.
Some lenders require you to find a co-signatory, who will become responsible for the repayment of the loan if you are unable to manage it. In this situation, you co-signatory may jeopardize their own financial good standing if you fall behind on payments.
Other lenders will ask for the loan to be secured against assets; you will need to consider, therefore, whether you are willing to risk repossession of these assets in the event that you are unable to meet your obligations to the lender.
Can a Consumer Proposal help me to manage my debt?
A consumer proposal is an offer made to creditors, in which you request an extension of the repayment period, a reduced balance, or both. This approach alleviates the magnitude of your debts and sets out a clear and affordable repayment schedule.
Our Licensed Insolvency Trustees will help you to create a proposal, and if more than 50% of your creditors approve it, all notified creditors will be bound by it. You will no longer accrue interest, and collection calls will stop.
A consumer proposal will appear on your credit report for a maximum of three years after your final payment. This will need to be taken into consideration as you evaluate your options.
Where can I turn next?
Whether you are considering debt consolidation North York, allow us to talk you through your options. If you decide to pursue a consumer proposal, our Licensed Insolvency Trustees will be able to help you throughout the entire process. A debt-free future is possible; contact Spergel today to arrange a free consultation.