Credit Card Debt Relief

Credit card debt relief is a common financial problem for many individuals and households.

With high interest rates, it can be difficult to get out of debt and stay debt-free. However, with the right strategies and tools, it is possible to achieve financial freedom.

There are some ideas for credit card debt relief while providing some tips for staying debt-free in the future.

Credit card debt is a type of unsecured debt that is incurred when you use a credit card to make purchases.

Unlike secured debts such as a mortgage or car loan, credit card debt is not secured by an asset. This means that if you are unable to pay your credit card debts, the lender cannot take your home or car.

However, the interest rates on credit card debt are often much higher than other types of debt, making it difficult to get out of debt.

There are several options available for credit card debt relief. Some of the most common include:

• Debt Consolidation:
  • This involves taking out a loan to pay off your credit card debt.
  • The idea is to consolidate your debts into one manageable payment with a lower interest rate.
• Debt Management Plan:
  • This option involves working with a credit counselling agency to create a plan for paying off your debts.
  • The agency will negotiate with your creditors on your behalf to lower your interest rates and monthly payments.
• Consumer Proposal:
  • A consumer proposal is a legal agreement between you and your creditors to repay a portion of your debt.
  • This option is available to individuals who are unable to pay their debts in full and can provide a way to avoid bankruptcy.
  • Proposals are great for most people as you keep assets and save thousands on debt
• Bankruptcy:
  • Bankruptcy is a legal process that allows individuals to discharge their debts and get a fresh start.
  • However, it should be used as a last resort as it can have serious long-term consequences.

Consumer proposals are legal applications made through an insolvency trustee.

In a consumer proposal the trustee arranges for the creditors to accept a lesser amount than is owing on the loan(s).

A new payment plan is arranged and paid usually over 5 years, with one monthly payment.

Credit card debt and unsecured loans are reduced up to 70%.

★★★★★ After years of struggling with my bills I was deeper and deeper in the hole, I searched for “debt relief” and found YanchDey. Only wish I’d called sooner.  I saved $28,000. Many thanks! Julie Davies, Oshawa.

You start by calling our office to discuss your bills & debts with one of our trustees.

There is no obligation or fee to speak with the trustee.  This is an opportunity to discuss your situation and learn what your options are.

The trustee will want to learn about:

• what do you owe
• who do you owe it to
• about your family situation e.g. who is working
• what is your household income, and
• what are your expenses

From that information, the trustee gives you options about how we can best provide you with relief.

The trustee would create a proposal for you to review and decide upon.

Where you agree to the trustee’s assessment, the trustee contacts the people you owe to advise them of your offer, reducing the amount and monthly payment.

When an insolvency trustee contacts your creditors, the creditors know they have to work with the trustee.

Credit card companies know that where a person files for bankruptcy, as unsecured credit holders they will often receive little or nothing on any unsecured debt.

The creditor will normally concede with our help giving you:

• relief from the total amount owed
• reducing monthly payments and increasing time to pay
• no further interest accumulates

Where for example you owed $20,000, the debt relief would reduce your balance owing to about $6,000, with monthly payments of $100/month over 5 years or less.

When you file for bankruptcy or a consumer proposal you must surrender all credit cards issued to you and in your control.

Most people understand that going without a credit card or having limitations maybe be a good thing for a while.

While in the bankruptcy or proposal and before it has been completed you may apply for a new card.  Where you are applying for a credit before the completion date you must disclose that you are in the middle of a bankruptcy or proposal.

Each credit card agency will regard the bankruptcy under their own terms and conditions so  “shop around”.

The key to staying debt-free is to create and maintain a budget that works for you. Here are some tips to help you stay on track:

• Track your spending:
  • Keep track of all of your spending, including small purchases and bills.
  • This will help you identify areas where you can cut back and make more informed spending decisions.
• Create a budget:
  • Use your spending information to create a budget that works for you.
  • Be realistic and make sure you allow yourself some wiggle room for unexpected expenses.
• Live below your means:
  • Try to live below your means by avoiding unnecessary expenses and living frugally.
  • This will help you save money and pay off your debts faster.
• Avoid new debt:
  • Avoid taking on new debt, including credit card debt, and focus on paying off your existing debts.
• Save for emergencies:
  • It’s important to have a savings cushion for emergencies, such as unexpected expenses or job loss.
  • Aim to save at least three to six months’ worth of living expenses.
  • Start small put a small amount in a bank account with each pay start with 10-25 dollars.