Credit Consolidation in Toronto

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Consolidating Credit in Toronto

More often called debt consolidation – credit consolidation involves combining credit related debts into one loan – with the net result of a lower interest rate and lower monthly payments.

There are 4 main credit consolidation options in Toronto. Which one you choose, should be based on your financial situation.

Credit Card Consolidation to One Credit Card

This type of consolidation involves moving the credit card balances from higher interest cards to a lower interest card. This is done to minimize the amount of interest being charged on credit cards.

Although this might solve a short term issue – it can be a disaster in the making, as people often then max out their higher interest cards again – and discover the ‘low interest’ card interest rate was only a limited time offer.

Credit Consolidation Loans

These loans are usually obtained through a financial organization such as a bank or a credit union. Their goal is to combine all the outstanding credit debt into one loan that will enable people to make lower monthly payments, at reduced interest rates.

For those who then stop using credit – this can be an excellent way out of debt – even though this type of loan may require using the debtor’s home as security.

Unfortunately, credit consolidation loans can be the beginning of a debt spiral – which occurs when the borrowers begin the all-too-common practice of continuing to max out credit cards and then taking out more consolidation loans.

Debt Management Programs

These programs are offered by licenced, not-for-profit credit counsellors and involve trying to negotiate a legally-non-binding agreement with the unsecured creditors to see if they will lower their interest rates. In addition, the debtors are taught how to budget and stay out of debt.

This type of program is excellent for the person who is not yet overcome by debt, is able to make the required monthly payments and is able to stop using credit. Unfortunately, not all creditors may choose to participate.

Consumer Proposals

Backed with the full authority of federal government legislation – consumer proposals are an excellent option for people who are insolvent (lacking the resources to repay their debts in a reasonable time), and have a secure enough income to consistently make manageable monthly payments towards their unsecured debt.

In Ontario, only bankruptcy trustees who are licensed by the Office of the Superintendent of Bankruptcy, such as David Sklar & Associates – are permitted to file and administer consumer proposals.

With the aid of their trustee and through a consumer proposal, a debtor offers to repay their eligible, unsecured creditors a portion of their outstanding debt over a period of up to 5 years. In exchange for this repayment – the unsecured creditors stop all interest charges, and stop all collection efforts.

Once the proposal is accepted by a majority of the creditors, it becomes legally-binding on all of the unsecured creditors covered in the proposal, and the debtor will then begin making monthly payments to the trustee for disbursal to their unsecured creditors.

In addition to honouring all the terms of the proposal, the debtor will attend credit counselling sessions to learn the skills to stay out of debt and build a better financial future.

Find Out More

If you are facing overwhelming debt in the Toronto area, you are welcome to call David Sklar & Associates, Trustee in Bankruptcy at 416-498-9200 to book a free consultation. We will review your finances with you and discuss all of your debt/credit consolidation options – in a professional and supportive environment.

 

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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Luc Valade
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Jennifer Norton's exceptional assistance with my consumer proposal was life-changing. Her professionalism, expertise, and dedication were evident from the start. Jennifer's thorough explanations and attention to detail created a tailored proposal that set a clear path to financial freedom. She went above and beyond, advocating for my best interests and providing invaluable support. Thanks to Jennifer, I'm on track to a stress-free financial future. I wholeheartedly recommend her – she's not just a financial expert; she's a life-changer. Thank you, Jennifer!
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From the moment I sat down in the office, I felt welcome and at ease. Grace Cuffaro was both friendly and highly informative. She is extremely knowledgeable and answered all of my questions in detail, making sure I understood before moving on. I was reassured throughout the process that I was making the right decision and that it was not uncommon nor anything to be ashamed of. I didn't expect my appointments to be such positive experiences, but that's exactly what they've been!
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I was in a tough financial position and found myself searching for relief. I came across David Sklar & Associates page when doing my research on financial advice. The reviews were amazing, but I was concern because I didn’t know what to expect. I made the decision to set up a consultation and had the pleasure to meet with Jennifer Norton. Right from the beginning, she was attentive, knowledgeable, and pleasant to meet with. The experience was painless and very educational. Jennifer made sure I understood my choices, answered my questions, and concerns promptly, in person, over the phone and via email. I’ve been working with Jennifer for a couple months now and I am pleased that Jennifer is the manager handling my file. I would and have recommend Jennifer Norton, David Sklar & Associates to anyone in need of direction regarding finances.
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Rhoda, Jerry, and the entire David Sklar & Associates Staff were very professional and were great to work with. They taught me a lot regarding financing and I would recommend them to anyone facing financial troubles as well. Rafael L
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