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Options for Debt Relief in Vancouver and Across BC
Many Canadians have high levels of debt. This is true in Vancouver, throughout British Columbia and across the country. A 2014 study showed that Vancouver residents had the biggest increase in year-over-year debt. The study, released by credit bureau TransUnion, stated that the average level of consumer debt in Vancouver reached $41,077 at the end of 2013. This was up seven per cent from 2012. There are a number of reasons for these high levels of debt. However, the result is the same: many people find themselves looking for debt relief in Vancouver.
If you’re struggling with debt and unable to pay your bills as they become due, you might be one of those people who is searching for debt relief. Vancouver is a large and diverse city and there are a number of options available to those who are looking for help.
Four main debt relief options are:
- Debt settlement
- Debt consolidation
- Consumer proposal
Each of these options has its own positives and drawbacks. There is no single debt relief solution that is the right choice for absolutely everyone. Each person is different, each financial situation is unique and every individual’s circumstances is distinct. When it comes to deciding which option to choose for your personal debt relief, Vancouver bankruptcy trustees are valuable resources. These are trained, licensed and regulated financial professionals. They can review your financial situation and provide you with the information that you need to make an informed decision on how to proceed.
While each person is different and each situation is different, here is a quick overview of four common debt relief options.
Debt settlement is a situation where a person or a debt settlement company contacts each individual creditor and tries to negotiate more favourable debt repayment terms. This process often results in reducing or eliminating the interest charged on the outstanding debt. In some cases, you may be able to negotiate a reduction in the overall amount of debt as well. If successful, debt settlement can lead to lower debt payments and ease your financial stress.
Debt consolidation involves taking out a new loan (called a debt consolidation loan) and using this loan to pay down your outstanding debt. The goal of this process is to find a new loan that has a lower interest rate that the overall interest rate of your outstanding debts. This process helps reduce the overall amount that you will need to pay back since there will be lower interest charges.
However, if you are in a tough financial situation, you may not be able to get a loan with a favourable interest rate and so this option may not work for you.
A consumer proposal is a situation where a person makes an offer to his or her unsecured creditors that will see them pay a portion of the debt owing over a period of time, if the proposal is accepted. The remaining debt will be discharged once the process has been completed successfully. A consumer proposal is a legal process that must be filed with a trustee in bankruptcy.
With a consumer proposal, if the majority of a person’s unsecured creditors agree to accept the proposal, then all unsecured creditors are bound by its terms. This is contrasted with the debt settlement process where individual negotiations must take place with each creditor.
In addition, the consumer proposal process provides legal protection against creditors, collection agencies, wage garnishments and legal action against you.
Bankruptcy is also a legal process. In bankruptcy, a person who is unable to pay his or her debts as they become due is provided with a process that will eliminate most or all outstanding debts. A trustee in bankruptcy is responsible for helping an individual file for bankruptcy and will also ensure that the entire bankruptcy process is fair to all involved. If you are considering bankruptcy, you will want to speak with a trustee to see if this option will work for you.
Finding Debt Relief Vancouver and Beyond
Debt relief in Vancouver is possible. High levels of debt may seem overwhelming, but they do not have to be. There are a number of things that you can do to improve your financial situation and eliminate your debt. Speaking with a trustee is a good step to take. A trustee will let you know which options are available to you, answer any questions you may have regarding these debt relief options, and help you proceed with the option you choose.