According to a report published by the credit monitoring agency Equifax, household debt continues to grow in Canada. According to the same report, 46% of those in debt managed to reduce their personal debt. On the other hand, household debt still recorded a rise of 3.3% and reached an overall average of $22,837 per person.
The reason that household debt would have climbed like that is simple. Even though fewer loans and mortgages have been contracted, the amounts borrowed are larger. This explains why the household debt ratio continues to rise in Canada.
Rest assured, there are several methods to get rid of your debt without having to resort to personal bankruptcy. If your household is part of the household debt statistics, we are happy to help you. Through our experienced financial advisors, discover the options available to you to help you get rid of debt permanently.
Household debt and debt consolidation
Even if the household debt ratio continues to grow, it is possible to reduce your debt ratio. Several financial solutions are available to you to eliminate your debt. Do not hesitate to seek help from an experienced financial advisor to know your options.
One of these options is debt consolidation. Debt consolidation involves consolidating your debts so that you do not have to manage different creditors. You borrow that amount from a financial institution. This method unfortunately does not reduce the amount of your debt.
Consolidation can help you better manage your debt and the stress that comes with it, but it’s not available to everyone. Indeed, consolidation is a practical solution, but only if you are able to repay 100% of your debts with interest. If that’s the case, debt consolidation is an ideal solution. Otherwise, you may end up with a debt that continues to grow. If you are not able to repay your debts and related interests in their entirety, rest assured, there is another option for you.
The consumer proposal
The consumer proposal is a good way to reduce household debt. This method is so effective that it can reduce a very large percentage of your debt. By doing business with an authorized trustee, you have the opportunity to negotiate with your creditors. Your trustee may therefore decrease or extend your payments depending on your ability to pay. Another major advantage of the consumer proposal is that you only have one payment to make per month, and this one is without interest.
Here are some of the other benefits of the consumer proposal to reduce household debt:
- A complete stop of interest charges
- Extend the repayment term up to 5 years
- Protect your belongings (car, house, RRSP and inheritance)
- Avoid bankruptcy
- End the harassment from your creditors, a seizure or other legal action
- The majority of debts are accepted for the consumer proposal. Debts such as credit cards, income tax debt, miscellaneous loans, telecommunication bills, etc.
If you want more information to get your household out of debt, do not hesitate to call our financial advisors.