Archive for Category 'Debt Consolidation', page 2

Question: can you consolidate all your loans, ie. car payments , credit cards , line of credit etc into one monthlty payment ensuring that all your debts are being paid but also reducing your overall monthly payments and stress?

Answer: Yes, you can get a debt consolidation loan to consolidate all of your debts.  Whether or not you qualify for the loan will be up to the bank or other lender, since qualification is based in part on your income.

Also, you should consider whether or not consolidating all of your loans makes sense.  For example, if you have a low interest car loan at, say, 5% from the dealer when you bought the car, it may not make sense to consolidate that debt into a loan with the bank where you pay 9% interest.  In general it makes sense to consolidate high interest debts, like credit cards, so you can eliminate your credit card debt and reduce the interest you are paying, which helps you get out of debt faster.

Question: I had managed to stay out of debt for nearly 40 years, but in the last 3 years I have accumulated $15,000 in debt. (went back to school) $5000 of that is credit card and $10,000 is a line of credit – both to the same bank. I make the minimum payments, however, it seems that my monthly minimum payments have been slowly increasing each month. I work permanent part time and am not managing to pay off the principle. Before I read this blog and new anything about debt repayment I phoned my bank. I asked if I could have my interest payments lowered. They said no flat out. Then I asked if there was some kind of fixed payment plan where I could consolidate my debt into one payment. I was informed that there was, but in order to qualify I would have to pay $325 monthly for 5 years. (totalling of course $19,500) But, they said that because my income to debt ratio is so high they wouldn’t feel comfortable doing that. My income is about $24,000 a year. I have no assets – no house, no rrsp’s a car worth about $1000, old used furniture and my clothes. What do you think is my best option?

Answer: If your income is $24,000 per year before taxes, it will be difficult to repay your debts in a reasonable period time.  We suggest the following approach:

First, make a budget to see exactly what you can afford to repay.  If you can afford to repay the debt, a debt management plan through a non-profit credit counsellor may be a viable option.

If you can afford to repay some of the debt, but not all of it, a consumer proposal may be a good option; for a consumer proposal, contact a trustee.

If none of those options work, the final option may be personal bankruptcy.  Again, contact a trustee for more information.

Either way, your money problems won’t go away on their own, so the sooner you take action, the sooner you will be able to get a fresh start.

Question:  I have found myself in a position with payday loans,etc after filing bankruptcy 9 years ago. I am interested in cleaning up my entire credit bureau and wiping a clean slate. Due to unforseen circumstances a few years ago I found myself borrowing from one payday company to pay another and since got myself into a bid. I am interested in the best way to fix and pay what I can so that this does not destroy my marriage once and for all.

Answer: There are a number of possible ways to deal with your money problems.

The first option will be to cut your expenses and place yourself on a strict budget, and then use the savings to repay the payday loans.  If the amounts are relatively small, this is a good option.

If you need help with this process, you could contact a non-profit credit counsellor for assistance.

If your credit is reasonably good, another option would be to go to the bank and get a debt consolidation loan.  Since your bankruptcy was nine years ago, it may be possible to qualify for a debt consolidation loan.

Question: My husband and I owe $96,500.00 in unsecured debt, and an additional $40,000.00 in secured debt. We do not own our own home, we rent.
We have never missed a payment nor have we ever been late on a payment. But we work to pay our debts. There is no money left over. Only the minimum is paid on our bills each month so we aren’t getting anywhere.
What would you recommend?

Answer: You have five choices.

1. Keep working hard, cut your expenses, and use whatever money have to pay off your debts, starting with the highest interest rate debts.  If you can only afford minimum payments, this startegy won’t work.

2. Get a consolidation loan from a bank.  If you have good credit, you may be able to consolidate your unsecured debts at a lower rate of interest, so that more of your payments go towards principal, and you repay your debts faster.  However, it is unlikely a bank will lend you $96,5000 with no collateral.

3. Do a Debt Management Plan through a non-profit credit counsellor.  To repay $96,500 over a 5 year period would cost over $1,600 per month, so credit counselling only works if you can afford it.

4. File a consumer proposal through a licensed trustee in your area.  In most consumer proposals you are able to repay less than the full amount owing, so in your case it may be possible to pay, say, $500 per month for three to five years to eliminate your debt.  Certain rules apply, but if your debts are joint with your husband, this may be a good option.

5. The final option is personal bankruptcy.  Bankruptcy eliminates your debt, but the payment you are required to make each month is based on your income.  The higher your income, the more you pay, so this may or may not be the correct option.  For more information, contact a licensed trustee in your area. 

There are options, so we strongly suggest that you investigate your options, and decide on the solution that’s right for you.

Question: If I go bankrupt, and I have a consolidation loan in which I used personal items as security, will the items be taken, even though I don’t have half of them anymore???

Answer: If you no longer have the items, they can’t be taken.

When you file personal bankruptcy, all creditors are notified.  Secured creditors will then want you to either continue paying the loan (which is often the case with a car loan or mortgage) or surrender the security.  If you don’t have the security, you can’t surrender it.  You could offer to pay the secured creditors the fair market value of the security (which in most cases is virtually nothing, since personal items are difficult to sell, other than at a garage sale).

Each secured creditor operates differently, so we suggest you talk to a bankruptcy trustee who is familiar with the creditors in your area; they will be able to advise you on the appropriate next steps.

Question: I am seriously delinquent on my credit cards. I was with settlement company that did not work for me.
i am trying to get an unsecured loan to settle all of my credit card debt. does anyone know where i could get it ???? my debt is around 10 thousand. i don’t know what to do or where to start !!???!!! i’m in such deep hole i don’t see the light.. please Help!!

Answer: You have a number of options.  For a loan, you can try your bank; if they have already said no, it will be difficult to qualify at another bank. You could try a finance company, but they generally charge very high rates of interest (up to 30%), so you are better off paying your credit cards at 18% than paying 30% on a finance company loan.

If you don’t qualify for a debt consolidation loan, and you need a fresh start, you should also consider a debt management plan, a consumer proposal or personal bankruptcy (just follow the links for more information).

Debt problems don’t usually get better on their own, so the sooner you take action, the sooner you will be living debt free!

Question: i have 5 credit cards with 60 days past due and i want to pay them all with one payment per month and i tried a debt consolidation loan but they said no because I am past due on monthy payments but my truck and car automaticly come out at the end of the month so i want to go bankrupt on my credit cards but will it affect my monthy truck and car payments?

Answer: In most cases you can go bankrupt and still continue to pay your secured creditors, such as with a car or truck loan.  However, there are two banks in Canada that do reposses your vehicle if you go bankrupt, even if your payments are up to date, so we strongly suggest that you contact a bankruptcy trustee to determine if your lender is one of the ones that will take your vehicle if you declare bankruptcy.

Question: how can i get a personal loan with bad credit?

Answer: it is very expensive to get a personal loan if you have bad credit.  First, you should see if you can afford a loan.  Try one of the many debt consolidation loans calculators that are available for free on the internet.  Then, approach your bank or finance company to see if you qualify.  In most cases, if you have bad credit, a loan will be very expensive.

For many people a better option is to investigate a consumer proposal or personal bankruptcy.

Question: when you go through a debt consolidation are you able to leave your house and car out of it?

Answer: yes, when you consolidate you can consolidate just your unsecured debts, and leave your mortgage and your car loan with your current lender.  It’s up to you to decide whether or not including everything is better or worse for you.

Question: when you go through a debt consolidation do you have to have your income tax complete from the prior year? if yes, what if you have not completed you income tax return do to owing then for your taxes and just makes another collection to worry about?

Answer: Yes, you should have your income tax completed before you apply for a debt consolidation loan, since the lender may ask to see a copy of your previous year’s tax return or notice of assessment to verify that you don’t have a large amount of tax owing to the government.  If you do owe money, it may be possible to include the amount you owe in your debt consolidation loan.