Putting All Your Debt In One Manageable Place

2016-04-08   minute read

Linda Paul

Debt Solutions

Consumer Proposal

If you have several different debts and you’re starting to have trouble managing them, you’ve probably already encountered the stress of trying to figure out who’s going to get paid and who’s not going to get paid this month. Juggling debt from month to month (or for some even week to week) can become completely overwhelming, especially when you’re pairing it with your regular living expenses. If this is your situation, you’re definitely in need of a viable debt solution that allows you to get ahead of your debt so you can get back to living.

Person holding their phone in front of a laptop

If you’re in a situation where you are comfortable that you can pay everyone, but need to simplify things (and possibly reduce your interest costs) in order to give yourself a little more financial freedom, then a consolidation program or consolidation loan might be the way to go.

Regardless of your debt circumstances, the most important thing to do before making another financial commitment, is to make sure to compare your options and get some sound advice from a professional before you make a decision.

There are a few different ways of consolidating your debt to make it more manageable – here are some examples along with details as to how they will affect you:

1. Consolidation loan from a bank:

  • No damage to your credit rating; helps your rating if you make all of your payments on time.
  • You will have to pay interest, but there is a good chance it will be less than what you’re currently paying on your credit cards and other debts.
  • In some cases, the bank may want collateral or a co-signor.

2. Consolidation loan from a finance company or secondary lender:

  • These generally carry a very high interest rate and in some cases, additional fees.
  • Often require collateral and /or co-signor.
  • May not reduce your overall interest costs.

3. Consolidation Program (via Non-Profit Organization):

  • Interest generally applies, usually at the same rate you were previously paying on each of your debts unless the creditors agree to reduce the rate.
  • Will negatively affect your credit rating.
  • Normally reduces your monthly debt payments to a single manageable monthly payment.
  • Participating creditors normally voluntarily suspend collection action.

4. Consumer Proposal:

  • Debt reduction/repayment plan done under Federal legislation.
  • Reduces total debt and monthly payments to an amount you can afford.
  • Will negatively affect your credit rating.
  • In most cases, no interest applies.
  • Reduces your debt payment to a single manageable monthly payment.
  • Prohibits collection action.

Feel free to contact your local MNP advisor for a free, no-obligation consultation. We can provide you with an in-depth review of all the options available to you so you can decide which debt solution best suits your unique situation and begin moving towards financial freedom.

Consultation icon