Debt Consolidation in Ontario: Paying Off Debts under One Account and Alternatives

It’s difficult to find a person who can say that he or she has never accrued any form of debt in their life. Debts can be accumulated in many ways – swiping a credit card, taking out a mortgage, or even financing the payments on a new car are just a few of the prominent examples. Naturally, debtors have an obligation to pay back everything.

Sadly, it’s rather common that those who have accumulated a large amount of debt don’t have enough money to repay everything when the time comes. In extreme cases, debtors may try to go on the run to avoid any creditors. This can lead to a slew of even worse problems, which is why the best (and often the hardest) solution is to pay up. It may be time to seek help from an Ontario debt consolidation service such as Paddon + Yorke Inc. if you find yourself buried under a mountain of debt.

Paddon + Yorke Inc. offers a service in line with debt consolidation but without the need to borrow funds to pay off all of your combined debt. The option, which is an alternative to declaring bankruptcy, is actually called a consumer proposal. It simply is a contract to settle 100% of your debt by paying all or a partial amount of the total amount owed over a period of not more than five years. An administrator from Paddon + Yorke will prepare a proposal to your creditors which provides a number of benefits including stopping the interest at the date of filing the proposal and stopping any further collection proceedings such as wage garnishments or asset seizures. If you have some extra income available then you can use these funds to make a monthly payment to Paddon + Yorke to potentially only pay back 20 to 40 per cent of your overall debt.

Traditional debt consolidation is simply the process of taking out a new loan with a bank or lending instituation to combine all debts into one account where the payments will be made. Debtors often prefer this option because of the convenience factor. However, since paying off debts is a massive undertaking in itself, you can consult a debt consolidation expert to provide you with advice on the most workable payment solutions.

When you are ready to undergo debt consolidation, look for a lender that can offer a special loan at a lower interest rate. The debt consolidation specialist can do a thorough evaluation of your situation and determine whether the debts with varying interest rates could be combined into a single debt with a lower interest rate. Usually, the banks require security in order for consolidation loans to be approved.

Alternatively, companies such as Paddon + Yorke Inc. can help you draft a workable Ontario consumer proposal, which is an alternative to traditional debt consolidation and bankruptcy, if your combined debts do not amount to more than $250,000 and you’d rather not file for bankruptcy. As described earlier, consumer proposals are special payment strategies that allow a debtor to pay off his or her arrears in a lump sum or in a series of payments over a maximum period of five years. During this period, the creditors will be ordered to keep their distance from the debtor as the latter settles accounts.

It is never too late to settle debts, even when the situation seems hopeless. Doing so with the assistance of debt settlement experts will help prevent the problem from escalating to an even more serious predicament.