Debt Consolidation in Thunder Bay
Thunder Bay, ON Debt Consolidation Services
Located in the province of Ontario, Thunder Bay is one of the most populous municipalities in the region.
It’s also a debt-stricken populace, and one of 9 cities within the “living challenged” umbrella.
Many families living in Thunder Bay have debt to income ratios that make the cost of living untenable no matter how hard they work.
As much as Thunder Bay households may understand that budgeting, saving and prudent investment are essential to live debt-free, the amount they spend on repaying their debts can make the prospect of saving virtually impossible.
Furthermore, households that have multiple debts from numerous creditors can find it very hard to keep track of the fluctuating interest levels across their debts.
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As such, many in Thunder Bay (and all over Canada) are almost certainly over-paying on interest, especially when they’ve been convinced by their creditors to opt for minimum repayments. Indeed, the national debt statistics paint a scary portrait of Canada’s reliance on credit.
The average Canadian household has over $20,000 of non-mortgage debt, spending 14.9% of their monthly disposable income on debt repayments of which 7.3% is dedicated to interest.
Fortunately, there is a better way.
How Debt Consolidation can be a lifeline for Thunder Bay residents
The good news, however, is that there are a range of options to help households in Thunder Bay take control of their debts.
While many assume that Personal Bankruptcy is the only way to liberate themselves from their debts, this is by no means your only available option.
Debt Consolidation can help you to repay your debts faster, waste less of your hard-earned money on interest, and reduce the stress and emotional exhaustion that so often accompany our debts.
Here we’ll look at some of your options when it comes to Debt Consolidation, their benefits and their caveats…
Use a Debt Consolidation Loan
If your credit is in good standing and you need more control and transparency when it comes to your debts, a Debt Consolidation Loan may be the answer.
It is quick and easy to set up and can see you significantly reduce the amount that you waste every month on interest.
Most credit cards, for instance, will have an interest rate somewhere between 19% and 29%.
This can mean that you spend a fortune on interest and if you are only making the minimum repayments, you could be paying off as little as $10 of the principal (how much you actually owe) every month.
What’s more, when you’re managing multiple credit cards, the different interest rates can be hard to keep track of.
A Debt Consolidation Loan will usually have a more manageable interest rate of around 10% helping you to pay off more of your principal and get debt-free faster.
Debt Consolidation Loans are used to repay and replace your existing debts.
As such, they may have positive effects on your credit rating.
Still, Debt Consolidation Loans have their caveats.
You may find that your monthly repayments are actually greater than they were when managing multiple debts.
However, you can take comfort in the knowledge that you’ll be able to repay your debts much faster.
Try Mortgage Refinancing
Want to spread your debts over a longer timeframe without wasting a small fortune on interest?
Liquidating some of your assets may to do this and potentially spend less on repaying your debts every month.
Mortgage Refinancing can not only improve your household cash flow, it can also put a stop to wage garnishment and threatening letters from creditors.
It’s important to note, however, that refinancing may also increase the overall interest rate of your mortgage product, resulting in slightly higher mortgage payments and prolonging the debt.
Set up a Debt Management Plan
If your credit rating is less than stellar and you don’t have any assets to leverage, don’t worry.
You still have options!
You may be able to set up a Debt Management Plan with your creditors, which may result in more favourable terms and less interest.
There are lots of non-profit Credit Counselling services that can help you set this up.
A plan can also consolidate your debts across several creditors, greatly reduce interest payments and in some cases can even allow you to waive interest altogether.
It’s important to note that Debt Management Plans are entered into voluntarily by creditors and they can back out of the agreement at any time.
So it’s especially important for you to keep up with your repayments.
While this option cannot be leveraged for large debts or government debts (including tax debts) it’s a good option for those with 2-3 creditors and less than $10,000 total debt.
Pursue a Consumer Proposal
Finally, a Consumer Proposal is a more legally enforceable alternative to a Debt Management Plan.
While your creditors can still take action if you don’t keep up with repayments, you still have more protection than under a voluntary plan.
What’s more, you may even be able to write off up to 80% of your principal debt and eliminate interest altogether.
You cannot pursue a Consumer Proposal on your own.
You’ll need a Licensed Insolvency Trustee to be your Proposal Administrator.
After looking closely at your assets, your finances and your circumstances, they’ll work with you to create a proposal that’s realistic and manageable for you.
If most of your creditors agree to the proposal (51% or more), all will be legally bound by its terms whether they voted in favour or not.
A Consumer Proposal takes 3-5 years to settle and stays on your credit report for a further 3 years after it has been settled.
Not sure which Debt Consolidation option is best for you? We’re here to help!
We’re here to help you find the right debt relief solution for your needs in Thunder Bay.
We’ve been doing this since 1999, and have helped over 200,000 Canadians from all walks of life to take control of their debts and gain financial freedom.
Call us today on (877)879-4770 to see how we can help you.