Getting Back in The Black: Credit Card Debt

Credit card debt – the giant elephant in the room that sometimes you don’t even want to acknowledge, let alone discuss with anyone else. We all know that sometimes it gets to the point that ignoring this monetary mountain seems like the only way to preserve your sanity – but if you’ve reached this point we urge you to reconsider! In this case, the phrase ignorance is bliss could never be more incorrect!!

Here are some realistic credit card debt solutions that can help you get a handle on these financial obligations:

• Pay the minimum monthly payment at the very least. Never ignore a credit card statement – this will quickly destroy your credit. If you can, pay a bit more than your minimum payment on each card. Since monthly minimum payments are mostly interest, paying just a bit more each month means you are actually paying off the balance.

• Pay the card with the highest interest first. With interest rates as high as 29%, your monthly payments on credit cards are going to be almost all interest – meaning very little is actually being achieved as far as paying these cards off. A popular method for getting rid of credit card debt is to start with the card with the highest interest rate and pay as much as your budget will allow on top of the minimum payment, while still maintaining the minimum payments on your other cards. Once that card if paid off, start on the card with the next highest interest rate.

Sure, these two suggestions are both great if possible – but if you can’t pay even the minimum, it might be time to think about some other options.

• Apply for a debt consolidation loan. One of the reasons that credit card debt is so problematic is because of its high interest. If you have more than one credit card company hounding you for payments on a regular basis, why not consolidate all of those debts into one with a consolidation loan with a lower interest rate. Not only does this option reduce the amount that you are required to pay (meaning more is applied to the amount owing rather than just empty interest payments), it also keeps it contained with one convenient monthly payment.

Can’t get a handle on your credit card debt and feel as though you are suffocating? Don’t let it become insurmountable. Get in touch with a debt solutions organization with the knowledge and expertise that can help you get a grip on this all too common financial problem.

For more about strategies for dealing with credit card debt please call DebtCare Canada today at 1-888-890-0888.

Educating Yourself on Dealing with Divorce Debt

It is common knowledge that when a marriage ends, finances often need a complete overhaul, and significant debt is often a product of splitting assets and building a new life. Dealing with divorce debt can sometimes be incredibly difficult, especially when it is coupled with the emotional turmoil that often accompanies the dissolution of a marriage. That being said, the best way to move forwards is to deal with those things that can increase your stress.

First, make an appointment to establish a budget. A professional financial consultant can help you go over all of your finances and create a budget that sticks to your post-divorce lifestyle. Since your monthly monetary intake will change significantly post-divorce, facing this head-on is crucial. Once you are on your own, it is even more essential to live within your financial means. Your lifestyle will change, that is inevitable, but creating a budget that takes this into account is an intelligent way to ensure that monthly bills are paid on time, all the time.

Has divorce created debt that seems insurmountable? You are not alone. Many divorced couples, after a divorce is finalized, find themselves faced with debt that accrued as a result of this event. The splitting of assets, selling a home, lawyer fees, etc. can mean a much higher debt load than was owed previously, and so dealing with divorce debt right away is important. If you don’t think that you can handle the debt that has built up over the course of the proceedings, you are like many other individuals out there, so don’t worry, there are options available to help you overcome this hurdle.

Debt consolidation. A debt consolidation is an important option to consider now that your income has been cut in half. This is because a debt consolidation will consolidate all debts into one (hence the name), meaning far less interest being paid monthly, and one convenient monthly payment. This makes meeting financial obligations much easier and saves you money.

Consumer proposal. Once marital debt has been divided, and the amounts you are required to pay monthly seem to far outweigh your monthly income, a consumer proposal might be a smart option. A consumer proposal is an arrangement made with your creditors that not only results in one low monthly payment you can afford, it also means a reduction in overall debt based on a proposal made to creditors for partial repayment and partial forgiveness.

These are just two of the many options available if you find yourself in the difficult financial position that is dealing with divorce debt. For more information on one of these options, please contact DebtCare Canada – we have years of experience helping individuals deal with debt and divorce:  1-888-890-0888.

Knowledge is Power – Changes to Your Equifax Credit Report Part 2

So, you’ve reviewed part 1 of this blog series and you have gained a better understanding of the elements of your credit report and what lenders are looking for. But wait – there is more to just understanding those elements - now there are new things that are reporting to your credit report that were not included in the past.

In the past, primarily loans, credit cards and lines of credit reported in the trade lines area of the credit report. This meant that as long as you paid those creditors on time, if you paid your phone bill for example a month late, it wouldn’t negatively impact your credit report.

Well things have changed.

Mortgages – mortgages now report to your credit report. So, if you make a payment late on your mortgage, it will negatively impact your credit score. With this there is a new M Rating that relates to the reporting of mortgages.

Telecommunication providers – While a few phone providers (both cell phone and home phone services) started this practice a couple of years ago, most are now reporting to your credit report. Make a payment late on your phone bill and risk damaging your credit. Typically telecommunication providers register their rating as an O rating because the payment terms are every 30 days.

To review the entire Equifax Credit Report User Guide – click here: http://www.equifax.com/pdfs/corp/CIS-105-E_Consumer_User_Guide.PDF.

If you have bad credit reporting to your credit report and don’t know what to do – Call us because we can help. DebtCare Canada: 1-888-890-0888. 

Knowledge is Power: Changes to Your Equifax Credit Report Part 1

In this day and age your credit report really matters! Where in the past, generally speaking, only lenders would ask to see your credit, now employers, insurance companies, even gyms ask to see your credit report before extending services/credit. The slightest blip on your credit report can even impact your ability to rent an apartment – never mind buying a house.

Understanding the basic fundamentals of your credit report is very important. More important is understanding which elements lenders measure when determining if they will extend you credit. Making matters more complicated, Equifax is constantly changing what is reported in the credit report and often lenders will view a different version of your credit report than what you see when you request your credit report.

This 2 part blog series will discuss the elements of your credit report, what they mean, what elements are included and how lenders interpret those elements. In part two of this series we will discuss changes to the credit report and also some things that lenders see on your credit report that you don’t.

Click here to view the elements of your credit report.

Now that you better understand the elements of your credit report, check out the second part in our blog series next week where we will discuss new things that now report to your credit report and things that are different on your credit report vs. your lender’s version of your credit report.

For more information about your credit report to how to improve your credit or deal with bad debts, please call DebtCare Canada today at: 1-888-890-0888.

Getting Out of Debt – Halloween Horror Stories to Learn From

No matter how you slice it, debt is a scary thing, especially when those phone calls start coming in from creditors threatening to take action in order to obtain what they are owed. In the spirit of the season, we thought we’d share some truly terrifying getting out of debt horror stories in the hopes that you can learn from other people’s mistakes and keep yourself protected!!

Scenario #1: One of the most tragic stories, and yet one we continue to hear on a regular basis, is the one about the “debt consultant” who requires payment in full before paying off your creditors, only to disappear (or the company claims bankruptcy) just as your payments to him are completed! This is such a terrible occurrence that often leaves individuals with little avenue for financial recourse, having paid out hundreds, if not thousands, of dollars in the belief that their debt will eventually be settled.

Lesson to be learned: Don’t trust an individual who asks for payment in full before paying off your creditors – this is just bad news all around!

Scenario #2: We’ve all received them in the mail – those offers from credit card companies that give you 6 months no interest and encourage you to pay off existing credit card debt with this new card. Sure, this may sound like a great option – but what happens when that 6 months is up? Not only have you impacted your credit report with the initial inquiry and subsequent credit seeking, you’ve also essentially traded one card limit for another.

Lesson to be learned: Unless you are certain that you can pay off the initial debt in its entirety before the time limit expires, toss these as you would any other credit card offer.

Scenario #3: Recently a couple entered our office with a story that is financially terrifying for a number of reasons. After attempting to deal with their debt on their own with little success, our clients called the number of a debt company they found posted on a billboard (bad idea #1). The initial phone meeting sounded promising, and the company sounded quite legitimate, so the couple decided that the guarantees sounded so great that the offer was one they could not pass up – until they were asked for a money transfer of $500 to secure the company’s services. Fortunately, after further inquiries, and more online research, the couple realized that this was a major scam and averted a crisis that likely would have resulted in a serious loss of money! What scares us here is the knowledge that far too often the temptation is too much and the due diligence just isn’t done!

Lesson to be learned: Do your research, read reviews, know who it is that you are placing your trust (and your money) in.

True debt relief from a professional, respected, well-known organization is the safest, most effective means of getting out of debt without incurring exorbitant fees and further financial stress. At DebtCare, we are committed to providing you with the knowledge and expertise to help you get out of debt as quickly as possible. Call us today 1-888-890-0888.

Ontario Consumer Proposal – The Ins and Outs

With Canadian consumer debt levels continuing to climb, year after year, it is no surprise that many Canadians are turning to alternative repayment methods in an effort to get out of debt. However, some organizations have taken advantage of individuals without a full understanding of debt, and offer solutions that are less than acceptable.

 

We strive to help individuals with debt problems with honest and realistic options that can eliminate financial stress. In this blog, we attempt to answer some of the most common questions regarding one of these very popular methods - consumer proposals - and provide you with some important information to help you make an informed decision.

Firstly, what is a consumer proposal exactly? A consumer proposal is a legally binding arrangement negotiated between you and your creditors (though an administrator – a licenced bankruptcy trustee) which arranges for a partial repayment of your total unsecured debt. Essentially you promise to repay a portion of your debt, and your creditors will forgive the remaining amount.

What does this mean? After meeting with a consumer proposal administrator and filling out the required forms, a proposal will be presented to all of your creditors (you can’t pick and choose here), who then have to respond and accept the agreement. If more than 50% reject it, you have to amend or adjust and refile. Once the proposal is accepted, you are required to pay a monthly payment to your administrator, who then pays your creditors.

There are a number of substantial benefits of filing a consumer proposal:

1.      Most wage garnishments will immediately stop.

2.      Interest stops accumulating on your current debt from the date you file.

3.      Collection agencies and creditors can’t contact you for payment – it is against the law!

4.      Your home or other assets are protected – creditors can’t touch them.

5.      You are only required to pay back a portion of your debt.

The downside: a consumer proposal does not include secured debts, such as a mortgage – only unsecured debts are covered. Furthermore, once you have filed a consumer proposal, your credit rating is going to be impacted. That being said, if you are in the position that makes a consumer proposal a valuable debt relief option, your credit has likely already been compromised. Consumer proposals typically mean an R rating on your credit report – but in many cases the benefits far outweigh the negatives.

If you are in over your head and are looking for a debt relief option, a consumer proposal can be a very advantageous strategy. They are complex though, and can’t be conducted by anyone but a licenced bankruptcy trustee, and so seeking some assistance is essential. Bear in mind however that it may not be advisable to go directly to a trustee since he by law acts for the creditors as well as the debtor, and his fee is a percentage of the debt being repaid. Accordingly, there is an incentive for the trustee to maximize the amount being paid to the creditors in the proposal. An independent advisor, such as DebtCare Canada, acting in your interests only, can help you to structure your proposal before approaching a trustee.

Want some more information about the ins and outs of a consumer proposal, or any other realistic debt relief method? Call DebtCare Canada today – we can help you out: 1-888-890-0888.