Debt Consolidation in Saskatoon – Non-Profit Guidance & Relief
Objective Non-Profit Options & Advice Beyond What Most Consolidation Companies Offer

A second way of consolidating debt is by consolidating payments through some sort of debt repayment program. Popular versions of this include a consumer proposal, Debt Management Program, and Orderly Payment of Debts. These programs consolidate all debts and bills into one monthly payment, dramatically reduce interest rates, and ensure all debt is paid off within 5 years. You can talk to one of our credit counsellors to learn more about these programs and see what your best options are to deal with your debt.

It seems as though more than 50% of debt consolidation loans don’t actually help people move forward financially. The problem is people simply rack up more debt on their credit cards or line of credit while their pay off their consolidation loan. For a debt consolidation loan to work, you have to follow a spending plan – a realistic budget – to carefully make sure that you’re not building up new debt while you’re paying off your old debt.

If you’re considering consolidation in terms of a debt repayment program such as a Debt Management Program or a consumer proposal, then you should know that neither of these are a good idea for everyone. They can be a great option for the right set of circumstances, but like a debt consolidation loan, they can also cause problems when used in the wrong set of circumstances. The key is to speak with a well trained, non-profit credit counsellor – like on of ours. They can go over your financial situation with you, help you put together a realistic budget, and then help you determine which option will work best for you to help you accomplish your financial goals.

Unfortunately, there are a fair number of financial professionals out there who actively push their preferred consolidation option on as many people as they can in an effort to make money rather than carefully match the individual to the option that will work best for the individual’s specific set of circumstances. This is why we always suggest that anyone who is unsure of their next steps speak with one of our credit counsellors before consolidating debt. They can potentially save you years of frustration, trouble, and a lot of money. Their help is free and confidential.

If you choose to consolidate through a debt repayment program such as a Debt Management Program or a consumer proposal, then, yes, these consolidation methods will hurt your credit score for a number of years after you finish the program (1 to 2 years for a Debt Management Program and 1 to 3 years for a consumer proposal). However, for most people, this doesn’t matter. If one of these debt relief options is the best solution for your financial situation, then your credit score is probably very low and one of these options can actually be a great way to turn your situation around (Note: a lot of people don’t realize that if your credit cards are close to being maxed out, this destroys your credit score. Ironically, people in this situation are often the most concerned about their credit score and don’t want to do anything to hurt it, but they don’t realize that it’s already so low that no bank or credit union will lend them money. So facing reality and getting onto a debt repayment program can actually be one of the quickest and most effective ways for these people to get their finances back on track and fix their credit score. This is a process that averages 2.5 years for Debt Management Programs and closer to 4 years for a consumer proposal, but it can work very well for many people – especially when you realistically no longer have the ability to repay the debt on your own without this help).

If you file for a consumer proposal with a bankruptcy trustee (officially called a Licensed Insolvency Trustee), the consumer proposal will report on your credit reports very similar to a bankruptcy while you’re on the program and for 1 to 3 years (depending on a couple of details) after you complete the program. However, after this point all records of the consumer proposal are erased from your credit reports.

Our organization, the Credit Counselling Society, offers a credit rebuilding program for everyone who does a Debt Management Program through us. It provides a way for someone to quickly re-establish their credit after completing the program.

If you’re wondering what your credit score is, you can find out for free from Equifax. You can also try out this credit score estimator that gives you an approximation of your credit score based on your answers to a series of questions. You can also play with it seeing how certain changes in your situation can impact your credit score.

If your credit score isn’t high enough to get a consolidation loan, you probably still have options. Speak with one of our credit counsellors. The can help you figure out how to get the most out of your finances and make a plan to get your finances back on track.

It depends. Here are the pros and cons followed by our suggestion.

Consolidating debt in Canada can potentially help you:

• Reduce financial stress
• Avoid higher cost options like payday loans
• Avoid late fees and penalty interest
• Simplify your finances by reducing many monthly payments into one
• Reduce interest and fees paid
• Pay off your debt within a set period of time
• Improve your credit by only having to remember one payment rather than many

Consolidating debt can also work against you by:

• Causing you to feel a false sense of accomplishment and misleading feeling of moving forward thinking your finances are better now when that may not be true at all.
• Causing you to feel that your problem is solved when you’ve only solved part of it. The greater part is putting together a realistic spending plan and following it so that you don’t rack up new debt while paying off the old debt. To make this happen you need to carefully monitor your financial situation so that new debt balances don’t begin to grow.

If you’re stressed about your finances and have a lot of credit card or payday loan debt, then we’d suggest your best option is to have a conversation with one of our credit counsellors. They’ll go over your financial situation with you, help you put together a realistic budget, and then explore all of your consolidation options with you. If a debt consolidation loan is your best option, they’ll recommend that, but it’s possible that you have other options too. About 50% of the people who speak with one of our credit counsellors leave with an action plan they can implement themselves. Another roughly 20% choose to go onto one of our repayment programs and the rest we refer to other professionals for more specialized financial help.

Debt consolidation typically involves combining many individual debts into one new loan. This new loan effectively consolidates the smaller debts into one debt at a new interest rate and replaces the many monthly payments you were making on the smaller debts with one payment on the new, larger debt.

A consumer proposal is a very different form of debt consolidation. It’s a legal process for people who are considered to be insolvent: meaning they are no longer able to pay their debts. It’s similar to bankruptcy in many ways. It’s governed by the same legislation, the Bankruptcy and Insolvency Act. It involves the courts, results in a permanent legal record, destroys your credit, and requires a bankruptcy trustee (Licensed Insolvency Trustee) to administer every aspect of it. The trustee essentially negotiates with your creditors and they vote on what he or she proposes. If the proposal is accepted by the majority of your creditors, then you will make one payment to the trustee each month and then he or she will disburse the funds to your various creditors after taking their fee. Extra advantages of a consumer proposal include the potential to significantly reduce the amount of debt you owe and legally stop collection actions against you.

While any bank, credit union, or online lender can offer you a debt consolidation loan, by law a consumer proposal in Saskatoon or anywhere else in Canada can only be offered and provided by a Licensed Insolvency Trustee. When considering the pros and cons of debt consolidation versus a consumer proposal in Saskatchewan, we think the best place to start is with one of our non-profit credit counsellors. They can walk you through these and other options such as a Debt Management Program – another different kind of consolidation – and help you figure out which option will work best for you based on your unique situation.

Good credit helps but isn’t always necessary. Bank, credit unions, and online lenders who offer reasonable interest rates will require a decent credit score. Finance companies, payday loan companies, and many online lenders can often provide you with a consolidation loan if you don’t have good credit but you may not be able to borrow as much as you were hoping for and the interest rate may be so high that it’s not even worth doing the debt consolidation. Saskatoon bad credit programs will also charge high interest rates, but there other debt consolidation alternatives such a Debt Management Program or consumer proposal where your credit doesn’t matter. These debt relief programs can effectively consolidate your debt payments into one monthly payment you can afford. You can speak with one of our credit counsellors to learn how these programs would apply to your situation and which would work best. There may be other options that work better for you than these too.

You can speak with one of our credit counsellors to learn more about the program. They will also help you explore any other options that might help you get your finance back on track more quickly and accomplish your financial goals. If you’re looking for free debt consolidation Saskatoon, this is probably the closest option you’ll find. Our help is entirely free, but if you choose to go on the program, we do charge a small fee to help cover our expenses.

If someone’s financial situation is really bad and they have so much debt that they can never hope to repay it all, then bankruptcy can be an option to give someone like this a fresh financial start. Having said this, there are other alternatives such as a consumer proposal or Debt Management Program that don’t have as severe consequences. One of our credit counsellors can help you explore these too and see how each one would apply to your situation.

There is no official Canada debt relief program or Canadian debt forgiveness program run by the government of Canada. This is a phrase invented by and used by marketers and sales people to make what they’re promoting sound official and legitimate. They are referring to a legal process that actually exists, but they’re probably misrepresenting it, their role in it, and are trying to double charge you for it and sell it to you in a way that’s illegal.

When advertisements and sales people refer to the “Canada debt relief program” or “Canadian debt forgiveness program” they are probably referring to the insolvency options provided by Canada’s Bankruptcy and Insolvency Act. This set of laws was first introduced in the 1800’s and consumer proposals were added to it in 1992. It allows Canadians who are insolvent (no longer able to repay their debts) to deal with their debt through either bankruptcy or a consumer proposal. The law states that both of these options can only be offered by a bankruptcy trustee (who are now officially called a Licensed Insolvency Trustee). No one else is allowed to even fill out the paper work for either of these options.

So if an advertisement or a sales person is trying to get you to pay their company for a consumer proposal and they’re not Licensed Insolvency Trustees, then what they’re doing is illegal. They will probably charge you for this service and then refer you to a bankruptcy trustee who is legally the only one allowed to provide you with a consumer proposal. So you will effectively pay twice for this service – being double-charged.

The advertisement or sales person might also claim they can reduce your debt by 70% to 80%. This is also a misleading claim. Technically and legally only a bankruptcy trustee can negotiate this debt reduction with your creditors. Anyone who refers you to this trustee has nothing to do with the negotiations. They also have nothing to do with setting up or administering the consumer proposal. All they do is act as a middleman charging you a fee for a referral to a bankruptcy trustee that you could have found your own on Google.

So if you come across an advertisement for the “Canada debt relief program” or “Canadian debt forgiveness program,” then you’re most likely encountering something that is misleading, unethical, and promoting an illegal service. We would encourage you instead to speak with one of our non-profit credit counsellors. They are paid a salary and not commission. So they can be as objective as possible, help you look into your options, and truly find what’s going to work the best for you based on your unique financial situation and your financial goals. If a consumer proposal turns out to be in your best interest, then they will refer you to a local, reputable bankruptcy trustee or even give you a list of local trustees for you to choose from.

If you are able to keep your spending in check so that you don’t accumulate new debt, then a debt consolidation loan can be a good way to simplify your finances by consolidating smaller debts into the new loan with one monthly payment. However, if you aren’t able to get this loan at a reasonable interest rate, then it’s not worth it. Some aggressive debt consolidators will not only charge you a high interest rate but they’ll also charge you a significant fee and upsell you expensive insurance (yet another fee).

Another variation of debt consolidation can be debt repayment programs that consolidate your debt payments into one affordable, monthly payment. In Saskatoon these are a Debt Management Program and a consumer proposal. Both of these programs have significant advantages and disadvantages that need to be carefully considered before enrolling in one of them. For the right set of circumstances, though, they can be worth it. For people who are really struggling to repay their debt, these programs can help them fully pay off their debt within 5 years, significantly reduce their stress, and help them live fairly normally while paying off the debt. The key to figuring out the right option for your situation is speaking with a non-profit credit counsellor. They’ll help you explore your options, narrow them down, and then put together a plan to get your finances back on track and get you out of debt within a reasonable period of time. If you’ve already approached your bank or credit union, but are now trying to find the best debt consolidation Saskatoon has to offer outside of them, we’d suggest this is the perfect place to start.