ALL >> Business >> View Article
Debt Consolidation: Not For Everyone
Debt is a common problem in most Canadian households. Luckily, there are many options available to those who qualify. However, the choices and options available have the potential to greatly affect personal credit rating for many years. For this reason, it is exceptionally important for those in financial distress to educate themselves on the options available to them, and take the time to discuss options such as debt consolidation loan and consumer proposals with a qualified financial expert.
For those overwhelmed by debt, particularly high interest credit card debt or unsecured loans, there are many options available. Two of the options that must be considered before all other are consumer proposal and debt consolidation loan. Each solution will alleviate some of the burdens associated with maintaining a heavy debt load; however, each comes with distinct benefits and disadvantages. The severity of the debtor’s financial situation should be judged to determine which option is best suited to meet their needs.
The principles of debt consolidation loan involve the ...
... combination of each of the debtor’s high interest creditors and combining them into a single low monthly payment. Beneficially, the interest and on-going maintenance charges that were being made on several accounts have now been amalgamated into a single payment with only one maintenance charge. This will enable debtors to save a great deal of money each month on their debt payments. However, it also involves applying for more credit, which if not watched closely, could result in further debt and more delinquent accounts.
A consumer proposal, on the other hand, is a viable bankruptcy alternative. Keep in mind that it is still consumer proposal, the debtor is not admitting their inability to meet their financial obligations, but rather stating that negotiations are necessary to restructure the debt and reduce the principle balance so that it can be repaid. Once a proposal has been submitted, the credit companies must then begin dealing with the bankruptcy trustee directly and cease all contact with the debtor. A proposal is deemed accepted if more than 25% of creditors agree to the terms. It is important to remember that filing a proposal will have a negative impact on personal credit rating, however, not nearly as negative as a bankruptcy and once the terms have been met it is possible to begin rebuilding credit worthiness slowly. All in all, negotiating a proposal will provide a clean slate without needing to go bankrupt.
About the Author
Two of the options that must be considered before all other are consumer proposals and debt consolidation loan. Each solution will alleviate some of the burdens associated with maintaining a heavy debt load; however, each comes with distinct benefits and disadvantages. The severity of the debtor’s financial situation should be judged to determine which option is best suited to meet their needs.
Add Comment
Business Articles
1. Unveiling The Material Characteristics Of Plastic PartsAuthor: adam.xu
2. Top 5 Beach View Resorts In Chennai For A Memorable Getaway
Author: greenmeadows resort
3. Relationship Counselling Den Haag Brings The Best Chance To Understand Each Other’s Needs!
Author: Angelika Matthias
4. Web Development Company: Guide For Hiring The Best
Author: Sagar Tech
5. Make A Business Website To Get Started Online
Author: Sagar Tech
6. Elevate Your Software Quality With Agile Advisors: Premier Software Testing Consultancy In Dubai, Uae
Author: kohan
7. Affordable Polyester Pleated Mesh From Top Manufacturers
Author: pavitra
8. Empowering Sustainable Development: Agile Advisors As Your Trusted Leed Certification Consultant In Dubai And Uae
Author: kohan
9. Buy Cats Eye Gemstone Online In Ahmedabad
Author: rishabhjains
10. Why Data Destruction And Sanitisation Are Important
Author: Destruction and Sanitisation
11. Stock Market Update: शेयर बाजार में लगातार चौथे हफ्ते बढ़त: क्या तेजी बरकरार रहेगी? जाने इस हफ्ते किन महत्वपूर्ण पहलुओं पर ध्यान देना चाहिए
Author: M Ratlami
12. Perfect Happy New Year Gift For Your Girlfriend Thoughtful Ideas For 2024
Author: MyFlowerTree
13. China Valmax Valve Co., Ltd
Author: China Valmax Valve Co., Ltd.
14. Mastering Clipping Path In Photoshop: A Guide To Precision Editing
Author: Sam
15. Expert Emergency And Cosmetic Dental Care Services For Families And Individuals In St. Louis
Author: Jessica Williams