Do you have a debt problem? This is a sad reality for thousands of people like you in Drummondville and elsewhere in the province. Fortunately, there are some great ways to get your finances back on track.
Do not believe that you are an isolated case and that your money problems have no outcome, far from it! The news is full of stories reporting the financial troubles of ordinary Quebecers and the over-indebtedness that affects families in large numbers.
Fortunately for you, many financial advisors or mortgage brokers in Drummondville are ready to explain the various options available to you, such as:
- Debt Consolidation in Drummondville
- Mortgage Refinancing
- Personal bankruptcy
- Consumer proposal, etc.
But how do you know which of these mysterious avenues is right for you? How to identify your needs according to your specific financial situation? Well, keep reading and we’ll try to find the right remedy for your money worries to become a thing of the past?
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Simply because it is the most advantageous solution in the majority of situations. Imagine this scenario: your debts start to accumulate, the interest rates on your credit cards make impossible the complete payment of each monthly bill and the unhappy creditors start to call you in a tone more and more insistent. The feeling of anxiety starts to rise and you are desperately looking for a solution to all your ills.
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This is what summarizes the principle of debt consolidation and it is also its “too good to be true” that makes it an option of the most popular with people in debt distress!
However, reality is not completely rosy. You need to have a record and a decent credit history for the bank to agree to grant you a debt consolidation loan. As the financial institution agrees to take a risk by paying your debts for you, it is justified that they ensure their own interests by not lending to anyone.
In addition, it is not excluded that an endorser must add his name to the agreement to guarantee your payment, otherwise, the bank will reject your request. Bonding is a legal process that is highly consequential for the endorser if you do not make the payments because he is the one who will end up with the burden of your debt. So, avoid using an endorser at all costs!
One of the reasons why debt consolidation is so common is that the interest rate is trading. In this regard, it is crucial to make sure that the interest rate attached to the consolidation loan is in deca of the total rate of your debts, otherwise, you will lose any advantage that the consolidation of debts brought.
The reasons why the bank may, therefore, refuse you a debt consolidation
Your financial institution or one to which you turn for debt consolidation may reject your application or accept it, depending on the criteria of your choice. She is king and master of this decision. It will most likely take into account:
- Your assets (the value of all your possessions
- Your income
- The credit history you demonstrate
- The sum of your loan
So, do not wait until the last minute if you can to carry out debt consolidation. Unpaid or overdue amounts will affect your request as they affect your credit history. Do not let too much debt accumulate!
The main benefits of consolidating your debts
Do not go bankrupt unnecessarily! Definitive benefits exist to lend you a hand in bad financial situations including consolidation.
With debt consolidation you will reach as follows:
A purification concerning your credit file
Late payments to multiple creditors hurt your rating. Your credit rating will recover gradually if you avoid these delays with this new arrangement. That will make you a better payer at the same time.
Easy debt management
There is no need to shell out here and there to try to lower your debt. You will no longer have to decide how much to pay to who or who will be the most insistent. Only one monthly payment will suffice from your financial institution and voila!
Interest costs much diminished
You will benefit from a much lower interest rate, especially as it applies to a single debt and no longer according to various non-advantageous rates and various amounts. However, make sure, as we mentioned above, to negotiate this rate below the bar of what it cost you previously.
A decrease in your monthly payments
A single payment is now required to be made to your financial institution every month that reflects your true ability to pay. This amount should reduce your budget burden and be less than what you had to pay before. You will no longer be overwhelmed by multiple debts and will be able to manage your budget more easily every month.
Factors that can lead you to consolidate your debts
In sum, 3 main reasons can lead you towards the decision of a consolidation.
- Endless interest costs that undermine your budget and never let you see the light at the end of the tunnel
- An unmanageable budget with so much debt
- Non-regular or declining income
If this is the case, consolidating your debt can be a good option to get you out of trouble. If in doubt, do not hesitate to consult a trustee in bankruptcy or a financial advisor (in Drummondville or elsewhere) to see if this decision can benefit you in the short and long term.
Now let’s look at other types of solutions.
What factors influence the acceptance of a consumer proposal?
The consumer proposal is a very tempting option when the bankruptcy starts to look you too closely! It consists in offering to your creditors to repay only part of your debts and to give up the excluded part of the offer, otherwise you risk becoming insolvent, declaring bankruptcy and thus falling under the protection of the Act. bankruptcy and insolvency.
This law prevents your creditors from claiming your dues directly from you and from taking any action against you in this regard because the actions taken against you are suspended under the law. It is with the authorized trustee in insolvency that your lenders will settle their accounts, which complicates their life, be assured!
But where is the catch in all that you wonder? It is at the level of acceptance of the consumer proposal, of course! The law allows you to offer very low reimbursement percentages to your creditors and it is up to them to accept or reject it through a vote.
However, not all proposals will be accepted, especially if they offer a ridiculous percentage. That’s why you need to consider the following few factors to maximize your chances that the offer will be accepted:
-The proposal must be reasonable: Just because the law allows you to submit ridiculous offers does not mean that your creditors will agree to lower themselves to that level. If your proposal is significantly out of the total amount of debt, it is because your situation is extremely precarious, so be consistent with the reality of your situation!
-The proposal must be made in proportion to your means: You out of debt to return the next year would be counterproductive, it is the least we can say! You should consult a trustee in bankruptcy or a financial advisor who will ensure that you find ways to pay your bills once the proposal is accepted!
-The proposal must be justifiable to creditors: As mentioned above, the amount of the proposal must be consistent with the precariousness of your situation. Since creditors are entitled to hold a meeting as part of a consumer proposal, they may require an explanation or justification for the percentage offered. That is why it is important not to draw a random percentage of your hat, as this may be badly received by your creditors!
In any case, you see that a consumer proposal has its share of financial and legal subtleties. Better to entrust your execution to qualified professionals who will put all the chances on your side and which will maximize your chances that your proposal is accepted!
Is it advantageous to refinance your mortgage?
Mortgage refinancing is not a decision that must be taken lightly. Indeed, although it can bring you many benefits, it can also be very expensive. This procedure often includes fees such as:
– Notary fees: As a modification of your mortgage takes place, the intervention of a notary is necessary during the process to ensure the proper execution of legal aspects.
-Valuation: As your mortgage is attached to your house, it will have to be reassessed by a professional accepted by the bank. There is no point in explaining that this expertise can be expensive.
Now that we’ve talked about the downsides, we should not forget the reasons that might convince you to opt for mortgage refinancing. Some of the benefits of mortgage refinancing include access to:
– More liquidity: The refinancing is generally done on the net value of your property, which gives you access to funds in proportion to the value of the latter.
-Access to a line of credit and a mortgage loan for better interest rates: It is not uncommon for institutions, in a case of mortgage refinancing, to combine these two options in order to make you benefit from interest rates. preferential interests.
-The renegotiation of a better interest rate: If your mortgage is coming to an end or the time is right for you, it is possible to renegotiate the interest on your mortgage!
-The realization of several projects, such as the renovation of your home! : The project can be as much about debt settlement as it is about improving an existing home, as long as these expenses do not embarrass you again!
It goes without saying that the best time to refinance your mortgage is when the value of your property rises and interest rates go down. This is where the benefits of your renegotiation will pay off. However, it is wise and even recommended to consult an expert in the field to avoid being seduced by false promises!