Interest rates in Canada are set to continue as inflation creeps up.
In late August, the governor of the Bank of Canada, Stephen Poloz, said that he will continue to raise interest rates in order to stay ahead of the inflation curve. With inflation reaching 3% in Canada, there’s pressure for key interest rates to rise and keep inflation from growing out of control.
Keeping inflation under control is one way the Bank of Canada keeps the cost of living down for consumers, but rising interest rates can make your life more expensive as well, especially if you have debt.
When key interest rates rise, it can impact your mortgage, your credit card interest rates, and the interest rate you will have to pay on future car loans and lines of credit. For most Canadians, the impact on their mortgage will be the most deeply felt, especially homeowners who bought at low-interest rates and high prices in recent years. Rising interest rates threaten to eat up many Canadians’ disposable income and push many into insolvency.
What can a bankruptcy trustee, now known as a Licensed Insolvency Trustee, do about mortgages squeezing your budget? Bankruptcy trustees don’t deal with secured debt like mortgages and car loans. Banks can foreclose on houses and repossess vehicles if you stop making payments.
But for many Canadian households, as interest rates rise, they have to choose between making mortgage payments and paying off credit card debt. At David Sklar & Associates, we can help you find the breathing room in your budget to keep up with more expensive mortgage payments.
When you’re already carrying multiple credit card balances, a rise in your mortgage payments can put you over the edge and make you insolvent. You can find out if you are insolvent, and therefore eligible for a consumer proposal or bankruptcy, by booking a consultation.
A bankruptcy trustee will look at your financial situation and suggest a way out of debt. You can book a free, no-obligation consultation at any David Sklar & Associates office in Toronto and the GTA.
From there, we will discuss your options, including bankruptcy and a consumer proposal. These are two tools that can provide debt relief for your unsecured debts, i.e., credit cards and bills. A bankruptcy trustee will explain the differences between consumer proposal and bankruptcy, and help you decide which one is right for you.
Choosing between bills to pay or struggling to find enough money at the end of the month to meet all your obligations is a sign that you’re under financial stress. A bankruptcy trustee will answer the question, what is a consumer proposal, and how a consumer proposal can reduce your credit card debt.
Beyond your mortgage, rising interest rates may also mean higher credit card interest rates. If your credit card company raises interest rates on you, you may be able to negotiate with them or find a better deal with another credit card provider. After years of low interest, the financial landscape in Canada is about to change. Don’t debt let your debt hold you back.