Debt Help Kenora: Warning Signs and Debt Relief Options

It’s easy to run up debt. Unfortunately, it’s not that easy to pay down. Interest accumulates and it seems like no matter how hard you try, the balances just don’t seem to budge. Before you know it, your bills are out of control and you need debt help. In Kenora, there are many options for people who need help with their debt.

Signs You Need Debt Help

In some cases, you can take control of your debt yourself. If your debt problems are the result of poor money management, a budget and debt reduction plan can get you on the right track again.

However, in some cases, your problems may be more than you can handle. A few warning signs you may need debt help include:

• You don’t have a savings account. If you don’t have a savings account to fall back on, a job loss or unexpected expense can be financially devastating.
• You have multiple credit cards, and most (or all) are at their limit. This is an indication that your debt is out of control. You may also be relying too heavily on credit cards
• You consistently make late payments or juggle payments. When your credit card or debt payments are always late because you can’t afford to pay them on time, it’s a sign you have too much debt.
• You can only afford to make minimum payments on your credit cards. Making minimum payments will only keep you in debt longer. You’ll also spend a lot of your money on interest.
• You consistently miss payments. Missing your payments results in costly late fees, putting you even further in the hole than before.
• You have at least one account in collections. When accounts go to collections, bill collectors call demanding payment, which can be stressful. It also severely damages your credit score.
• Your wages or your bank account is being garnished by a creditor. At this point, you are losing a significant portion of your income to pay just one creditor. The need for help when this is happening is critical.

Debt Relief Options in Kenora

If one or more of these situations apply to you, you could probably benefit from debt help. These are a few options that may be available to you:

• Debt consolidation loan. This type of loan is used to pay off all your debts at once. Then, instead of making multiple payments to your creditors, you make just one lower interest payment for your loan. However, they often require a good credit score and collateral and they are only a benefit if you can get a lower interest rate than you are currently paying. Also, if you cannot make your payments now, you won’t be able to pay this loan either.
• Consumer Proposal. This is an agreement between you and your creditors that allows you to settle your unsecured debts for less than is owed. It is to be repaid within no more than five years. It also provides protection against creditors. Consumer Proposals can only be filed by Licensed Insolvency Trustees (LIT), so you need to meet with an LIT to see if this is a viable option for you. Once a settled amount is negotiated, and the creditors have voted to accept it, you make one payment to your trustee, who then distributes the funds among your creditors.

While your credit rating is probably badly damaged by your debt situation, it is important to note that a Consumer Proposal is only listed by the credit bureaus for 3 years after the completion of your proposal. Thus, the proposal is an important step in improving your credit rating.

• Bankruptcy. Bankruptcy also relieves you of your unsecured debts. A bankruptcy is generally cheaper than a proposal and almost always the fastest way to get out of debt, except perhaps a lottery win. However, unlike a proposal, if you have assets that are not considered exempt in your Province, you may need to buy them back, or have them sold for the benefit of your creditors. Most people do not have any assets to which this applies, but your trustee will want to give you a clear picture before you make a decision, of what you can expect in this regard.

A Bankruptcy is listed with the various credit bureaus for between 6 and 7 years after your discharge from bankruptcy. The good news is that you can be discharged from Bankruptcy within 9 or 21 months, and start rebuilding your credit immediately.

It can be difficult to know where to turn for debt help. In Kenora, LCTaylor, Licensed Insolvency Trustees, are an excellent resource. They will review your situation and help you make a decision about which option works best for you.