When you are struggling to pay the bills and making debt payments, it only adds to the stress. Delayed payments can lead to increased interest rates. While you are struggling to pay your debt, you must opt for Debt Consolidation Hamilton. This approach will provide you with the option to get all your debts as one big loan and pay it off one instalment at a time. However, before you opt for this it is essential to have a debt management plan in place. In this article, we would be answering some of the most frequently asked questions about the debt management plan.
Who can qualify for this program?
A Canadian with an eligible source of income and who owes $8,000 or more in secured debts can qualify for the debt management program. The representative would be able to provide you with a comprehensive list of the eligibility criterion.
What types of debts are included in the program?
The debt management program includes almost all types of unsecured debt. Some common debt types that the program can help you with include payday loans, credit card balances, credit lines, taxes owed to CRA, instalment loans, student loans, foreclosure debts, EI Overpayments, utility bills, court judgments and personal loans, to name a few. However, most debt management plans don’t provide help with debts that pertain to child support, alimony and fines which have been imposed by the courts.
How much debt will be reduced by it?
The debt management plan can manage to cut the debt by at least 60%. That is such an approximate number, the exact amount of debt reduction is dependent on your financial situation then. An experienced and knowledgeable counsellor will help you to reduce the debt from 50% to 75% in most situations. The plan will also help to stop the interest almost instantly.
Can it help in stopping wage garnishment and collection calls?
When the debt has been piling, and you begin to default on payments, the collection agents will call you left, right and centre, which only adds to the stress of the situation. When you have a debt relief program, it will help to put an end to all the collection calls. Apart from that, the wage garnishments can also be stopped within 48 hours.
How will it impact the credit rating?
A lot of debt harms the credit rating. Even with a debt management plan in place, you can’t expect to start again with a clean slate. However, as the debts begin to resolve you will see an improvement in your credit history and score. If your credit score is poor, you can opt for credit repair solutions that can help to improve your credit history and rating.
Should you file for bankruptcy?
No, you shouldn’t because most of the debts can be resolved. The debt management plan has been designed to help you pay back all your debt. Filling bankruptcy is always the last option.