THE 5 BEST CONSOLIDATED CREDIT SOLUTIONS FOR YOUR NEEDS

You have to choose from several consolidated credit solutions, but how will you know which one is right for you?  Consolidated Credit is a topic that interests many of our clients, so it’s one we will cover in today’s post.

Note that the right solution for you really will depend on your needs and specific situation. 

Before deciding on one consolidated credit solution, you’ll need to consider things like:

  • Your credit score
  • Your current budget
  • How much you owe
  • Other financial obligations

Additionally, working with a licensed insolvency trustee helps ensure you choose the best route for consolidating your credit.

Based on all of these things and the guidance they provide, there are a few primary consolidated credit solutions you will choose from: 

  1. Debt consolidation
  2. DMP (Debt management program)
  3. Debt settlement
  4. Consumer proposal
  5. Bankruptcy
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    The Top 5 Consolidated Credit Solutions

    Now, let’s explore each of these options in further detail.

    Debt consolidation

    This option involves taking out a single personal loan. Then, you use this one loan to pay off all your existing creditors.

    We cover the pros and cons of this option in this post in further detail; however, for many people, paying down a single loan is preferable rather than managing several debts at once. In addition, if you make your monthly payments in full on time, debt consolidation can also help you improve your credit score. 

    (We discuss credit scores and how they work in this article)

    Debt management program

    Essentially, a debt management program (DMP) is a professionally supported debt repayment plan. Working with a credit counselling agency, you enrol in a DMP and make one monthly payment to them. Then, they distribute the payment to your creditors as agreed.

     

    Debt settlement

    Debt settlement is an attractive option for many people as it can often mean settling your debts for less than you owe. Working with a settlement company, you enrol in a debt settlement program. Then, the settlement firm negotiates with your creditors on your behalf, often lowering the amount you owe in the process. 

     

    Consumer proposal

    A consumer proposal is the second most common consolidated credit solution you will hear about after bankruptcy. In this case, it means settling with your creditors for a lesser amount than you owe them.

    As we explain in this post,

    “A consumer proposal provides a cash settlement solution to your creditors while allowing the individual to retain their assets and reduce the damage to their credit status. A consumer proposal is an alternative to bankruptcy while offering the creditors a more significant cash settlement while avoiding the stigma of bankruptcy.”

    Consumer proposals are the best-consolidated credit solution for many people. If the creditors approve, they tend to offer more than bankruptcy. Additionally, they allow you to keep your assets and pay lower monthly premiums proactively. A consumer proposal is often a good route to take, but it’s best to consult an expert.

     

    Bankruptcy

    Finally, we come to bankruptcy as a consolidated credit solution. Filing for bankruptcy involves turning your assets to a licensed insolvency trustee to help ensure your creditors get some of the debts you owe them. 

    Bankruptcy does erase your debts in a sense, but this comes with other consequences. To mitigate future financial risk, your licensed insolvency trustee will ensure you understand the warning signs of financial difficulties, the role credit plays in your life, and how to obtain and use credit in the future.

    To qualify for bankruptcy in Alberta, you must: 

    • Owe more than $1000
    • Be insolvent (this means you are unable to pay your debts as they become due)
    • Live or do business in Canada
    • Have more debts than assets

    Are you ready to discuss which of these consolidated credit solutions is best for you? The experienced, non-judgemental, and compassionate team at Fox-Miles & Associates is here to help. So call us today to get started. 

    Did You Learn A Lot About Credit Scores In Edmonton From This Post?

    Here are three more posts you might like to read next:

    Title
    THE 5 BEST CONSOLIDATED CREDIT SOLUTIONS FOR YOUR NEEDS
    Article
    THE 5 BEST CONSOLIDATED CREDIT SOLUTIONS FOR YOUR NEEDS
    Description
    We discuss the top five consolidated credit solutions in Alberta, including bankruptcy, consumer proposals, and debt management programs.
    Author
    Publisher Name
    Fox-Miles & Associates Licensed Insolvency Trustee
    Publisher Logo