- Free consultation
- Reduce your monthly payments
- Speak with a debt expert
- Stop collection calls
- Take control of your debt
There are plenty of places debt can come from. However, that shouldn’t stop you from getting ahead. If your debt is getting out of hand and basic solutions aren’t enough, debt settlement in Prince Edward Island might be the right move. Curious to know more? Keep reading, because Loans Canada has the information you need.
A debt settlement involves reaching out to your creditors to come up with an agreement that allows you to pay back a portion of what you owe, rather than your full outstanding balance. If the terms of the settlement are accepted, you’ll likely pay back the amount in one lump sum. Generally, debt settlement in Prince Edward Island can be done in two ways:
It is possible to negotiate a debt settlement agreement by yourself. You should be able to prove to your creditors that you cannot pay them back in full within a reasonable amount of time. This may work because some creditors would prefer that you pay back some of what you owe, rather than you going bankrupt and pay them nothing.
Here’s how to negotiate a debt settlement on your own.
Before you choose to negotiate a solo debt settlement, it’s helpful to seek outside advice from a credit counsellor or financial advisor, simply to make sure it’s the right move. Ask them whatever questions about debt settlement you can think of. They can even talk you through your negotiation, so you’ll know exactly what to say and how your creditors should be treating you.
Since debt settlement can be a bit complicated, it’s often reassuring to have someone in your corner, making sure your creditors are treating you fairly and vice versa. However, before choosing a debt settlement company, understand that there are a few more risks involved than with a solo negotiation.
Firstly, these companies aren’t free-of-charge and, like any business, they’ll need compensation for their services. While they usually won’t charge you until your debt settlement is complete, ask them about their fees beforehand and factor those costs into your budget. Another expense you can’t afford may result in more debt issues.
Secondly, not all debt settlement companies are legitimate. Unfortunately, scammers are aware that people need debt settlements because they are in serious financial situations. Desperate to get rid of their debt, unsuspecting borrowers give out their personal and financial information without thinking it through. Then, not only are they still stuck in debt, their finances are compromised. Always do research before you choose a debt settlement company.
If you’d prefer the aid of a debt settlement company, there are questions you should be asking them that will help you confirm their legitimacy and whether they’re right for your situation, including but not limited to:
For more questions to ask your debt settlement company, look at this.
Now, before you decide that debt settlement in Prince Edward Island is right for you, there are a few important considerations to take into account, such as:
Want to know more about installment loans in Prince Edward Island? Look here.
Debt settlement in Prince Edward Island is a drastic step that may only cause further strain to your already stressful financial situation. As such, you should only choose this path when:
Click here for more information about qualifying for debt settlement.
In Canada, your credit score is a useful tool that you can use to get approved for loans and credit products. In addition, the higher your score is, the more affordable your interest rate for those products will be because your lenders will consider you less risky. Nonetheless, you need to be comfortable with the significant impact debt settlement will have on your credit score. This is because debt settlement is a type of financial delinquency, just like a consumer proposal or a bankruptcy (only less damaging). Delinquencies will show up on your credit report for 3-7 years after they are completed. They also cause your credit score to decrease, sometimes by a big margin.
Click here to learn how long other information stays on your credit report.
As a result, it may be difficult to get approved for other credit products during the settlement and even in the years that follow, while you wait for Canada’s credit reporting agencies (Equifax and TransUnion) to expunge it from your report. During that time, potential creditors can view your report, see your damaged credit, and may not want to lend you new credit, considering that you were already in debt to other creditors. Make sure that you’re able to get by without loans, credit cards, and other products until you can improve your credit again.
All this being said, the ultimate benefit of debt settlement is that, if all goes well, you’ll have less debt on your plate. This should make it easier to keep up with your other outstanding payments. Slowly but surely, you can use the money you’ve saved from your reduced payment to deal with all your other expenses. As long as you’re making your other payments on time and in full, you can eventually work your way back up to good credit, and your bad credit days will be in the past.
For more information about credit improvement on Prince Edward Island, look here.
During your search for debt management tips and products, you may have concluded that debt settlement isn’t right for you after all. Don’t worry, there are plenty of alternatives that you can choose from, including but not limited to:
Both of these services allow you to lump all your outstanding debts together and pay them off in one shot. These solutions are effective because both will leave you with only one monthly payment to deal with until your new balance is paid off in full.
Want to learn more about credit counselling on Prince Edward Island? Check this out.
If you’re mortgaging a home on Prince Edward Island, you may have built up some home equity, which happens when you make mortgage payments or increase your home’s market value in some way (renovations, real estate price increase, etc.). Before you choose to access your equity, be certain that you can afford to pay it back in full and on time. Home equity products are secured against your home. If you default on too many payments, you can risk losing your home to a foreclosure.
Generally speaking, at least 20% equity is required in order to access it. Once you’ve built up that much, there are two different ways to use it:
As we said, debt settlement in Prince Edward Island is meant to help you avoid filing for a consumer proposal or bankruptcy, as both the latter choices can cause even worse damage to your financial health. However, they are worth mentioning, especially if your debt situation has become so unmanageable that debt settlement isn’t a viable solution.
If debt settlement has proven to be the right choice for you, there’s no better place to go than Loans Canada. We’re confident that we can help you with your debt settlement or any other debt solution you need on Prince Edward Island. Contact us today!
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