How to consolidate your debt

By: Kyle Harris BA. LLB. CIRP, Licensed Insolvency Trustee

People often wonder, how can I consolidate my debt so I don’t pay such high interest. There are a few ways to accomplish this. The first option for a person to consolidate their debt, and the option that most people think of initially is a consolidation loan or a line of credit. This is basically taking all your debt (Credit Cards, Pay day Loans, etc.) and putting them all under one umbrella, while continuing to pay 100% of the debt plus interest. This option is generally only available to people who have good credit scores, and still costs significant interest.

The other option, and the one that a Licensed Insolvency Trustee can help you with is a consumer proposal. In a consumer proposal, the Trustee takes all of your debts, combines them, and makes an offer to your creditors to pay off a percentage of the total debt. The offer can range between 20% of the total debt to 35% of the total debt depending on the creditors. The proposal is generally paid in monthly installments for a period of up to a maximum of 60 months (5 years). Once the proposal is paid off, the balance of the debt is gone forever and the creditors can never collect on this debt.

Should you have any questions about this topic feel free to reach out to our staff in Oshawa, Pickering, Toronto or any of our 11 convenient locations by calling toll free 1.800.268.8093.

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