Consolidate your debts or Refinance your mortgage
What are the solutions available to you in Laval for your over-indebtedness? Do you know the implications of each of the following options? The advantages, disadvantages, costs, delays… If the answer is no, look no further, because this web platform Bye Bye Debts specializes in referencing qualified financial professionals, and who will be able to give you on the right path.
Moreover, we have a large network of partners in Laval to help you choose which of the consolidation, mortgage refinancing or bankruptcy is best for your situation.
Debt consolidation vs. Consumer proposal
There are so many financial recovery options that it can become difficult to get into all this technical jardon. For example, do you know what differentiates the consumer proposition from debt consolidation? Do you know the impacts of each of these options and the benefits of each? It is likely that no and that is why we are not busy presenting you the characteristics of these two mechanisms so that you make an informed decision.
First of all, debt consolidation differs from the consumer proposal in one essential respect, namely that it does not reduce the total amount you have to repay. Indeed, although you save big on interest by consolidating your debts, the principle is that the bank will repay your debts for you in order to become your only creditor.
The interest rate will be lower than what you pay to your too many lenders and your financial management will be simplified. That’s what makes debt consolidation a great option, but be aware that it does not reduce your repayable amount.
In return, this is a key aspect of the consumer proposal. The principle is very simple: submit a reduced payment offer to your creditors so that they give up a part of their due. But why would they accept? Because this option is more advantageous for them than to see you declare bankruptcy and having to fight among all your other lenders to get paid.
The consumer proposal is governed by the Bankruptcy and Insolvency Act, meaning that it must pass through a complex legal process. In particular, the services of a licensed insolvency trustee are required to file the necessary documents with the Office of the Superintendent of Bankruptcy. This step is intended to be crucial, since it has the effect of suspending the actions taken against you by your creditors, that is to say, the lawsuits as well as the seizures.
Your creditors will also have to vote and decide if your proposal is worth accepting. A simple majority of 51% will be enough for it to “go to the board”, but it is obvious that not all of your creditors have the same strike force. The value of their vote is determined by the value of their claim to you.
In addition, the use of a consumer proposal will appear on your credit report for up to 3 years after the end of the proposal. As for the duration of the proposal itself, it can not last more than 5 years under the law, without mentioning that your credit rating will automatically change to R7.
All in all, while debt consolidation is a simpler option with less time and credit impact, the consumer proposal allows you to avoid more obligations. You will soon notice that each of these options has its advantages and disadvantages and that only the seriousness of your financial situation can not guide you to the right choice.
It is always wise to consult an expert before you dive both feet in the wrong way. It is a happy coincidence that you have come across the most effective referencing platform in Quebec by Bye Bye Debts to find the financial advisor you need!
Personal bankruptcy benefits despite everything!
It may seem odd to approach bankruptcy in a positive way, but one must admit that there are benefits even in such circumstances. It is above all a departure to nine. It helps put an end to an unsustainable financial situation with no way out.
But concretely, what are the implications of personal bankruptcy? In a way, it’s a mechanism to protect your creditors from having to stop harassing you by demanding payment, but it’s also a way to stop any legal action against you.
From the time the documents are filed with the Office of the Superintendent of Bankruptcy, the right of your lenders to take legal action against you for enforcement of the payment is suspended. As in the case of a consumer proposal, the insolvency trustee will communicate with your creditors and speak on your behalf, since bankruptcy means that you can no longer contact them directly.
In addition to the protective aspect of personal bankruptcy, one must also consider its financial impact. It has the effect of freeing you from most of your debts, which are considered to be free. Reliable debts are not found in this list:
-Student loans (unless you have completed studies more than 7 years before declaring bankruptcy)
-Finens and tickets
-Debts resulting from fraud or misrepresentation
-Some other debts
So by choosing an option such as personal bankruptcy, you make the choice to end unpaid bills and get rid of the financial burden that robs you of life once and for all.
What are the risks of mortgage refinancing?
Mortgage refinancing is a viable option for paying off debts. By taking out a loan based on the value of your home, you will have access to cash that will allow you to repay the amounts you owe. However, care must be taken not to repeat the same mistakes. Indeed, nothing is used to refinance a mortgage if it is to fall back into trouble as soon as there is a little money in the account.
As for the risks of mortgage refinancing, they are mainly in terms of the costs incurred by the process. Most mortgage contracts include penalty clauses for cancellation or refinancing. It is important to read this important document carefully and consult an expert in the field to obtain a cost / benefit analysis of the refinancing.
There are many ways to refinance a mortgage, such as terminating the mortgage, extending your existing loan, or obtaining a line of credit based on the equity in your home. Once again, there is no point in reminding you that expertise fees always accompany mortgage refinancing and that these costs can quickly eliminate the benefits envisaged.
In any case, the mortgage refinancing should be done according to the current market, ie, considering the market interest rates and the possibilities of saving in your own situation. This is obviously done by retaining the services of an expert that only this platform would find you!
Let us find the right expert for you in Laval!
There is still time to remedy the situation! You are not condemned to spend the rest of your days in debt. You will certainly have noticed that there are not the options that are missing to solve your money problems!
For example, debt consolidation allows you to consolidate your debts into one payment to simplify your finances and save money. You could also unlock cash on a portion of the value of your home (mortgage refinance).