Credit Cards

Five (5) options for dealing with credit card debts:

• credit counselling
• debt consolidation
• debt Settlements
• consumer proposals
• bankruptcy

Any program to reduce your debts and finances is a positive step, each program has its own benefits and shortcomings.

Call us to discuss your credit card debt and learn what solution is best for you.

Some we recommend and others that we caution our clients about.

Credit Counselling

• amount of debt is not reduced
• counsellor gives recommendations on debt
• usually non-profit/no fees

Debt Consolidation

• the amount of debt is not reduced
• loans are consolidated with a lower interest rate
• arrange at your own at bank or financial institution

Debt Settlements

• fee based through debt settlement companies
• creditors are asked to take a one time payment on the debt
• no obligation on creditors to agree

Consumer Proposals

• no upfront fee to consumer
• government legislated program
• credit card debt usually reduced by 70% or more
• garnishments and harassing phone calls are stopped
• best choice for debt relief where you have stable income

Bankruptcy

• there is a fee
• you may lose possessions
• government legislated program
• debt, garnishments and any claims are stopped
• done as last resort

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 repayment loan is arranged 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 credit card debts I was deeper and deeper in the hole, finally I called.  I saved $28,000 in credit card debt. Many thanks! Julie Davies, Oshawa.

You start by calling our office to discuss your credit card debt 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 best to reduce your credit card debt.

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 credit card companies 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 credit card debt.

The creditor will normally concede with our help giving you:

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

Where you for example you owed for $20,000, the credit card 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 the you must surrender all credit cards issued to and in your control.

This includes all credit cards even if they are not in use or do not have a balance.

Credit card debt may have contributed to the series of events leading up to the credit card debt.

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 completed you may apply for any new credit 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” for the best credit card.