Are You a Good Candidate for Debt Consolidation?
If your monthly debt payments are becoming difficult to manage, then you should consider debt consolidation as a possible solution. Consolidation can make debt easier to manage by combining all of your credit into one single loan. The loan will ideally have a lower interest rate and lower monthly payments than you pay on all of your debts separately. The licensed Vancouver insolvency trustees at Crowe MacKay & Company can help you figure out whether a debt consolidation loan is a good financial choice.
By combining credit card bills, medical bills, personal loans, and other forms of credit into one single monthly bill, you should have an easier time keeping track of your finances. Sometimes, this can be the first step to recovering from insolvency in Vancouver. Other times, however, you should consider an alternative route.
When You Should Consider Debt Consolidation
Debt consolidation can be a good option if you are having trouble keeping up with monthly payments on multiple debts, as well as if your monthly income isn't covering your expenses. It can be particularly effective if the majority of your debt is credit card debt. Credit cards tend to have high interest rates, so consolidating all of your credit card debt into a single, low-interest loan can help you save considerably.
However, not everyone in the situation described above will be a good candidate for a consolidation loan. You are more likely to receive a consolidation loan for insolvency if you have managed to maintain relatively good credit, if you have a consistent cash flow, and if the total debt you owe doesn't exceed 50% of your income.
When You Should Consider Other Options
In certain situations, an insolvency trustee will recommend that you consider options other than debt consolidation. One such situation is when you simply don't have a lot of debt. If you have a plan to pay off your debt within a year's time, then the potential savings from consolidating will likely be negligible.
You should also consider other options if it will likely take you more than five years to pay off your debt, if your debt exceeds 50% of your income, or if you have bad credit. In these cases, you should be looking more towards debt relief. Debt settlement is usually the best strategy to try after consolidation. Bankruptcy may also sometimes be the best fit for your situation, allowing you to start fresh.
Crowe MacKay & Company: Licensed Insolvency Trustees in Vancouver
Debt can sometimes feel insurmountable, but there is almost always a reasonable option for insolvency in Vancouver. When you are in debt to many different creditors, Crowe MacKay & Company is here to help. Our licensed insolvency trustees will review your unique needs and let you know whether debt consolidation in Vancouver or another insolvency solution is best suited to you.
If you have any more questions about debt consolidation or about our insolvency services, just contact Crowe MacKay & Company today.