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Are you looking for the best way to escape from under a mountain of debt? There are debt relief options that can help. Here, you’ll find answers to common questions, frequently asked.

The correct information can help you make the right choice for your needs. At Adamson and Associates, our team of Licensed Insolvency Trustees are experts in debt relief. We’ll work with you to find the best way to deal with your debt.  If you’d like more information, you can live chat, fill out the online form or call Adamson and Associates at 519-310-5646 for a free consultation.

What is a creditor?

     A creditor is someone you owe money to. Common types of creditors are financial institutions,  firms that lend money like payday loan companies, or individuals.

What is a debtor?

     A debtor is someone who owes money to someone else. If you have a car loan with your financial institution, for example, you are a debtor.

I can’t pay all my debts, what can I do?

     If you are struggling financially, the first step is to create a monthly budget if you haven’t already done so.

How will making a monthly budget help me?

     A detailed monthly budget will show you where your money is going. You’ll be able to identify areas that you may be able to cut spending.

What is debt relief?

     Debt relief is various strategies to help you deal with the money you owe to manage your payments or eliminate your debts.

Where can I find debt relief?

     Licensed Insolvency Trustees provide government-approved debt relief strategies. Credit counsellors may be able to offer some options as well.

What types of debt relief are there?

     Credit counselling, debt consolidation, debt management, debt settlement, Consumer Proposals and Bankruptcy are different types of debt relief.

Can credit counselling help me?

     Credit counselling provides financial education, budgeting help, and debt relief options. The information can help you understand how to manage your finances, pay off your debt, or offer solutions to handle your debt load.

Do credit counsellors offer debt relief?

     Credit counselling offers debt relief solutions that are not legally binding, which means your creditors can still demand payment from you even after accepting the credit counsellor’s debt relief solution. You can get help with debt consolidation, debt settlements, or a debt management plan from a credit counsellor. They may refer you to a Licensed Insolvency Trustee if they cannot help you.

How do credit counsellors differ from Licensed Insolvency Trustees?

     Credit counsellors can have accreditation, but it is not a requirement. Their solutions are not legally binding or government-approved. They may need to refer you to a Licensed Insolvency Trustee (LIT).

     The government licenses LITs after they complete extensive training. LITs offer government-approved, legally binding solutions for your debt. The Office of the Superintendent of Bankruptcy oversees LITs.

What is a debt management plan?

     Credit counsellors offer debt management plans. They negotiate with your creditors to reduce your interest rates on your debts.  Your credit card debts and sometimes other unsecured debts are consolidated into one amount. You send the credit counsellor one monthly payment, and they use the money to pay your creditors until you pay off your debts.

Is debt consolidation the same as a debt management plan?

     No, the two are different. You can consolidate your debt by getting a consolidation loan or a line of credit. You can also use your home’s equity to pay off your debts or transfer your credit balances to a low-rate credit card.

     A credit counsellor sets up a debt management plan and reduces or eliminates the interest on your debt. A debt consolidation loan may not negatively affect your credit rating, but a debt management plan will.

What is a debt settlement?

     With a debt settlement plan, you or a firm you hire negotiates with your creditors to settle your debt for a lesser amount. Your creditors agree to take a lump sum payment for an agreed-upon amount and will cancel the rest of the debt you owe in exchange.

Should I hire a debt settlement company to help me?

     Debt settlement companies charge fees to negotiate a settlement on your behalf. Your creditors may not agree to the settlement, and debt settlements are not legally binding. Additionally, debt settlement companies may refer you to a LIT and charge a referral fee. You can avoid the fees by negotiating a settlement or contacting a LIT.

How do I know if I am insolvent?

     You are insolvent if you don’t have enough income or money to cover your expenses and debt payments.

What is a Consumer Proposal?

     A Consumer Proposal is a legally binding, government-approved debt relief solution that a Licensed Insolvency Trustee files on your behalf.  A Consumer Proposal can reduce the amount you owe by up to 80%. It will combine your unsecured debt into one payment, allowing up to five years to pay it off.

How can filing a Consumer Proposal help me?

     A Consumer Proposal can reduce the amount of unsecured debt you owe by up to 80%, give you one payment to manage and a plan to be debt-free in five years or less.

Can I keep my assets if I file a Consumer Proposal?

     Yes, you can keep your assets if you file a Consumer Proposal.

How is Bankruptcy different from a Consumer Proposal?

     If you file for Bankruptcy, your creditors write off your debts. You may or may not be able to keep all your assets. Each province details the assets you can keep when you file for Bankruptcy.

What’s the difference between unsecured and secured debt?

     Unsecured debt does not have an asset securing it. Credit cards, lines of credit, overdraft protection, and some lines of credit are typically unsecured. Typically, assets like the equity in your home, an investment or a vehicle secures debt. A creditor can seize and sell the asset you used to secure your debt if you don’t pay.

Will I lose my house if I file for Bankruptcy?

     The equity you have in your home will determine if you can keep your house or not when you file for Bankruptcy. Each province has a set of rules which detail the assets you can keep if you file for Bankruptcy, including the allowable amount of equity in your home.

Will debt relief affect my credit rating?

     A debt consolidation loan may not affect your credit rating. Other debt relief programs, such as a debt management plan, debt settlement plan, Consumer Proposal and Bankruptcy, will negatively affect your credit rating. Filing for Bankruptcy will have the most severe impact on your credit report.

When should I look for debt relief?

     You may need debt relief if your payments are behind, you need to borrow more money to meet your living expenses and pay your debts, or your creditors are calling you, threatening you or want to garnish your wages.

Where is the best place to get debt help?

     Licensed Insolvency Trustees offer credit counselling, Consumer Proposals and Bankruptcy. Their solutions are legally binding and protect you from collection calls, legal action, and wage garnishment from your creditors.

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