Real debt relief reduces your total unsecured debt. Unsecured debt is unique in that it’s debt that’s unconnected to any physical assets. For example, a mortgage or a car loan is a secured debt. If you fail to make payments, the bank or the lender can foreclose or repossess the asset because it’s a physical asset that allows them to recoup all or part of their costs. Unsecured debts are a different kind of debt that includes:
- Credit card debt
- Student loans
- Payday loans
- Utility bills
- Lines of credit
- Medical bills
Unsecured debt can’t easily be recouped that way, which causes creditors to use tactics like hiring debt collectors, wage garnishments, or cutting off service (as a utility might). They can also have extremely high interest rates, such as credit cards and payday loans, which potentially make the debt impossible to get out of.
When your debt is so high that it’s impossible for you to get out of itwith your present income or assets, you are insolvent. If you’re insolvent, you need to get debt relief help today from a bankruptcy trustee, or as they are now known, a Licensed Insolvency Trustee.
Real debt relief is either a consumer proposal or a bankruptcy. Bankruptcies and consumer proposals in Toronto are offered by firms like David Sklar & Associates.Bankruptcy trustees must handle any consumer proposals or bankruptcies for individual consumers. In a bankruptcy, your non-exempt assets (or equity in non-exempt assets) are sold to pay your unsecured creditors. This may also include extra income. After this, your total debt is discharged.
If you get a consumer proposal in Toronto instead, your assets would be untouched and you would agree to pay a fixed amount every month to your unsecured creditors. Consumer proposals are often preferred by bankruptcy trustees like David Sklar & Associates because they protect your assets and they actually reduce the total amount of debt you owe. Whereas the remainder of a debt in a bankruptcy would be discharged, in a consumer proposal, your creditors agree to a reduced amount that you can afford to pay based on your current income and basic expenses. A majority of your creditors must accept your proposal, but with the help of bankruptcy trustees in Toronto like David Sklar & Associates, you can find an agreement that’s reasonable for all parties.
Don’t be fooled by offers from debt consolidation lenders. Their loans won’t reduce the amount of money you actually have to pay. A good debt consolidation loan will offer a lower interest rate, but if your credit rating is already poor, you will have a hard time finding real lower interest rates. Get a consumer proposal in Toronto to actually reduce the total amount of debt you have to pay back. You can wind up repaying only a fraction of your unsecured debt and enjoy protection from debt collectors and wage garnishments. There’s a smarter way out of debt and it starts by calling a bankruptcy trustee in Toronto.