Sometimes it can seem like debt consolidation is impossible. In many cases, you’re expected to have good credit to get consolidation options, but your credit score may be low based on the debt, to begin with. You might feel like it’s an option that simply won’t work for you, but that isn’t true. There are great options out there, even if you don’t have perfect credit. At 4 Pillars, we want everyone to know what alternatives are out there, so we’ll explore a few possibilities for you.
Consumer Proposal
You might think that you should avoid consumer proposal, but the truth is that it is typically better than going through a bankruptcy. However, this option requires that you pay your creditors some amount of what you owe and there will be a time limit on that. This can be a great option for someone who is struggling and wants to avoid bankruptcy or needs to keep certain assets. You should be aware that defaulting on a consumer proposal will put you back in the same position you were before and can lead to legal action by the creditors, so consider your options before deciding.
Debt Consolidation Loans
Finance companies, banks, and credit unions often offer debt consolidation loans which can be used to pay off both unsecured debt. Basically, rather than paying multiple payments to several places each month, you make a single payment to the new loan. That said, some finance companies and banks will only provide this type of loan if you have a decent credit score. Sometimes you can work around this if you get a co-signer to vouch for you on loan.
Debt Consolidation Program
When you choose a debt consolidation program, all of your debt it combined for a single monthly payment, just like the last option. However, this program is traditionally offered through a credit counseling agency. The program stop or reduce the interest on your debts but not reduce the principle. This is an option that you do not need good credit to qualify for but will have a negative impact on your credit rating if you do have good credit.
If you are ready to learn more about your options, 4 Pillars in Victoria is here to help. Our consultants are educated and experienced in helping individuals who are in financial trouble. If you want to find out more about how we can help, you can visit us at www.4PillarsDebtConsultants.ca.
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