Debt Consolidation in Toronto – Options to Consider
If you are one of the many people in the Toronto area looking for a way to consolidate debt into one affordable payment – there are several types of debt consolidation that may be available to you.
These consolidation options depend on a number of factors, the most important of which is your current financial situation.
Note: secured debts, such as mortgages, are not included in debt consolidation. Debt consolidation is used for unsecured debts such as credit cards, payday loans, etc.
Debt Consolidation Solutions for Solvent Debtors
If you are solvent, that is, you have the money or assets to pay all your debts in an orderly fashion, you may be able to consolidate debts using:
- Home Equity Loans – if you have equity in your home, and you qualify for a loan – a home equity loan might enable you to pay off your other debts (such as credit cards) and end up with one lower monthly payment.
- Personal Loans – if you qualify for a personal loan that has a lower interest rate that your unsecured debt, you may be able to pay off your debts and end up with a lower monthly payment.
- Lines of Credits – if you qualify for a line of credit, you may be able to pay off your debts and reduce your monthly payments.
- Debt Management Programs – offered through non-profit credit counsellors, these programs involve professional counsellors who, if you qualify, will negotiate with your creditors to reduced the interest and fees being charged and set up one monthly payment to be distributed to your creditors. These plans are not legally binding on your creditors and not all of your creditors may agree to them.
Debt Consolidation Solutions for Insolvent Debtors
If you are insolvent – that is you do not have the money or assets to pay your debts, you may be eligible for a Consumer Proposal which will:
- Consolidate debts (unsecured) into one monthly payment
- Significantly reduce the total amount owing
- Stop all interest charges
- Stop all collection efforts (phone calls, legal actions, garnishees, etc)
In addition, Consumer Proposals are legally binding on all of your unsecured creditors.
Under the Bankruptcy and Insolvency Act, Consumer Proposals can only be filed and administered by Licensed Trustees in Bankruptcy, such as David Sklar & Associates, Inc.
If you live in the Toronto area, and are considering consolidating your debts, we offer a Free consultation with David Sklar & Associates, Inc – at all of our six convenient locations. During your consultation, our Licensed Debt Professionals™ will review your financial situation and discuss all of your debt consolidation options. Call us at 416-498-9200 to book your appointment.