Debt Options in Windsor

Do you live in Windsor or Essex County? Are you looking for a solution to your debt problems?

You probably came to site because you are research your options, searching for information on the internet about how to deal with your debt.

Dealing with debts can be a stressful and confusing. It seems that every day another company is on TV or the radio telling you they can help you settle you debts. Every one you talk to seems to suggest one option is best over others or to stay away from certain options as they’re bad for you.

How do you know who to trust and what’s right for you? What are your options? Everyone has 7 basic options.

I’ll give you a brief summary of the advantages and disadvantages of each option:

1) Do nothing –

Advantage: You’re saving money by not paying your debt. This could be practical if you have no assets and live on income such as ODSP, Social Assistance, EI, CPP or pensions that are protected from garnishment.
Disadvantage: If you have assets or wages that can be garnisheed, the creditors will likely sue you if you don’t pay them.

2) Budget Better –

Advantage: You might be surprised how much money you can save and put towards your debts if you sit down with a blank piece of paper and separate those needs and wants. You might also be able to achieve this by selling assets you no longer need or want. If you can get out of trouble yourself, you can protect your credit rating.
Disadvantage: Budgets are always changing, emergencies happen and budgeting take a lot of discipline.

3) Debt Consolidation / Re-financing –

Advantage: If your creditors are willing to give you a payment break, lower the interest or re-finance you can protect your credit rating.
Disadvantage: Some lenders will often say no, and if they do say yes, they often have conditions, like higher interest rates, requirements that someone else co-sign, or that you have to secure the debt as a 2nd mortgage to your house which puts your house at greater risk if you run into problems again.

4) Credit Counselling

Non for profit credit counsellors such as Financial Fitness Windsor can help by consolidating unsecured debts into a debt management plan (DMP).
Advantage: All of your unsecured debt is grouped into one payment and they creditors will often agree to cancel or reduce future interest charges.
Disadvantage: The programs are usually limited to a maximum of 4 years, so take your debt load, divide it by 48 months and there’s your payment. If it’s too high, it likely won’t work for you. it also affects your credit rating.

5) Debt Settlement

Advantage: If you can save money and offer creditors a lump sum settlement, some creditors may be willing to negotiate a settlement with you. If it works, there is a potential for savings.
Disadvantage: The settlement is not necessarily legally binding and it only works if you have a lump sum of money to offer the creditors right away. If you have to wait a few months or even years to try and save up the money to offer a settlement, the creditor will likely sue you in the mean time.

6) Consumer Proposal –

Advantage: It’s a payment designed to fit easily into your budget, it’s legally binding, immediately stops harassment and legal threats and it has no effect on your assets.
Disadvantage: It affects your credit rating.

7) Bankruptcy
Advantage: You’re legally protected from your creditors and it’s generally considered the quickest and cheapest way of gaining debt relief.
Disadvantage: It affects your credit rating. It may not be right for you if you’d lose control of assets or have reasonably high income.

If you want to review which option may be best for you, give me a call at 519-250-8060 or send me an email using the form on this page.

{ 1 comment… read it below or add one }

Brittany July 4, 2014 at 8:29 pm

Hello, I am 23 years old and struggling with alot of debts I have. I currently live with my boyfriend who is also having some troubles and I have been told about going to see someone that can help with it. We eventually would like to buy a house and start getting things on track and was wondering what I could do and what help I would need to do so. I have been getting no where with getting out of debt and its just very hard. I would greatly appreciate it if I could set up a meeting and have some advice thrown my way.
Thanks , Brittany.

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