You must take Action and get out of Debt! You know you need to get out of debt. You think about it all the time—you feel you can’t stop worrying. Stop worrying and start taking action! These two baby steps can start to relieve your fear and stress instantly.
Step 1: Make a list your debts you need to pay excluding rent or mortgage. List the name of the creditor, amount of maximum allowed debt, amount of actual debt, interest rate and amount of minimum monthly payment.
Step 2: Know yourself. You can decide to either consolidate/combine the debt into one payment OR start to pay off your smallest debt while paying interest on all other debts. If you have the personality where you need to see results in order to stay motivated then choose the second option. However, if you can consolidate your debt into one easy payment and stay focused—you will be pleased with the results.
One of the factors in the calculation of your credit score is the amount of your total available credit which is currently being used. As you pay down your debt, your credit score will be rising at the same time.
Talk to a trustee in bankruptcy regarding these options and let an expert help you decide what is best for you and your financial situation. The moment you become debt free is the moment you can begin to save for your future and have the life that you deserve.
What are the disadvantages of hiring a debt settlement firm?
Anyone searching for debt relief options on the internet will likely see ads for firms offering debt settlement services to Ontario residents. These firms might be traditional debt settlement firms—which are supposed to hold the necessary license issued by the Ontario
Government—or they might be a firm exempt from this requirement. This latter group includes law firms, credit counselling agencies, and bankruptcy trustees. Debt settlement involves an informal agreement between a creditor and a consumer under which the creditor agrees to accept a one-time lump sum payment for less than one hundred percent of the outstanding balance as settlement in full. This is an alternative to a consumer proposal which is only available through a bankruptcy trustee.
No creditor will agree to an informal proposal unless your account is a minimum of six months overdue. In contrast, there is no such requirement for making a consumer proposal. Compared with a consumer proposal, debt settlement—or an informal proposal—has a number of disadvantages.
You will receive collection calls
You might be sued
Results are not guaranteed
It may be expensive
If you are an Ontario resident and you hire a traditional debt settlement firm then the fee they can charge you for settling a particular account is capped at ten percent of the amount of the debt on the date you signed a debt settlement agreement. If, however, you hire a law firm, you might pay substantially more in fees.
What Happens If I Lie To My Licensed Insolvency Trustee?
It is a statutory obligation for every person filing an assignment in bankruptcy to make full disclosure of all assets, liabilities, income and living expenses. As well, you must disclose information as to the disposal of any of your assets within the past 12 months (5 years if the asset is real estate). If you intentionally do not disclose significant information to your trustee, you will have your discharge from bankruptcy opposed by the trustee.
You might even be required to appear in court to explain why you did not disclose full and complete information. The court can impose penalties on you, depending on the significance of the non-disclosure. You should also be aware that you are asked under oath to swear that all of the information that you gave to the trustee is reasonable and accurate to the best of your knowledge and belief.
Swearing a false affidavit is called “perjury” and now you may be charged under the Criminal Code as well as under the Bankruptcy and Insolvency Act. Not a good situation to find yourself in when you are already stressed out over your debts.
A reverse mortgage is a home loan for individuals or couples 55 years or older. You borrow from the value of your home and does not require monthly mortgage payments. However, interest is added to the loan’s balance and if no payments are made the interest can eventually exceed the value of the home. Reverse mortgages are risky and you need legal advice before considering this even as an option.
Advertising makes a reverse mortgage sound attractive because they push 4 points of interest:
1. You don’t have a monthly payment until you move.
2. You can receive a lump sum of money if you’ve paid off your home—sometimes 50% of the value of your home.
3. If you are house poor, you have extra cash money—you can use the money for healthcare needs or home repair and living expenses.
4. Tax-free source of income
1- Interest on the reverse mortgage increases which in turn decreases the equity you have in your home. The interest can sometimes increase to more than the house is worth and there are higher interest rates than most mortgages.