The first step in combating debt is to analyze where you are spending your money. If you see a clear way to stop incurring more debt and take action immediately to consistently spend less, you may be able to regain control on your own. However, if your financial troubles persist, an MNP Trustee can discuss different options with you such as Consumer Proposals, Bankruptcy or put you in contact with a Credit Counselling organization during our free...

My wages are being garnished to pay for my outstanding debts. I am afraid to answer the phone because it may be a debt collector calling. My creditors are threatening to sue me, repossess my personal property, or hire a collection agency to recover their money. I have been borrowing money for household expenses from friends and family to make it from one pay cheque to the next. I am paying one creditor one month and another...

Licensed Insolvency Trustees (LITs) are highly qualified debt professionals who are federally regulated. Licensed through the Office of the Superintendent of Bankruptcy , LITs adhere to a firm code of ethics and strict government regulations. As such, Licensed Insolvency Trustees are the only professionals who can file Consumer Proposals and bankruptcies on behalf of both individuals and corporations. The role of a LIT is to do a thorough review...

Insolvency is a formal term from bankruptcy law. If you are insolvent, it means your liabilities or debts exceed the value of your assets. You would also be considered insolvent if you are unable to pay your debts on time. This is an important consideration in financial analysis and credit matters.

A Consumer Proposal is for individuals that still have a source of income and are able to make payments to creditors, but need to change the arrangement of their payments. A Consumer Proposal can change the length of payment (up to a maximum term of 5 years) and the overall amount the debtor is required to pay. Whereas a Bankruptcy can be considered a clean start, as debts to unsecured creditors are typically forgiven. A Bankruptcy lowers your credit...

In situations where debt is not too excessive and somewhat manageable, a credit counselling service may be able to review and assist you with your financial situation. These organizations contact creditors on your behalf, provide education on avoiding debt and personal budgeting strategies, as well as counselling. A credit counsellor will meet with you and determine how much you can pay each month towards your bills. The counsellor then works as...

With an informal debt settlement, you contact your creditors yourself to see if they can offer any options to aid your debt relief. If you work with a credit counselling organization, they will contact your creditors to negotiate your repayment terms and provide you with education and counselling.

Depending on how quickly you take action and begin paying off your debt, debt consolidation should have little or no effect on your credit rating. However, late payments, failure to make minimum payments or being sent to collection can negatively affect your credit rating. The longer you wait to repay your outstanding debt, the more your credit rating will be negatively affected.

In order to qualify for debt consolidation, you must have a satisfactory crediting rating and sufficient income to sustain the loan. The financial institution issuing you the loan will conduct an assessment to determine if you meet their criteria.

As this is not a formal legal process, you choose the debts which you would like to pay down with the new consolidation loan.