Debt Relief Solutions- How Does Debt Relief Work

How does debt relief work?

Credit debt relief works by giving the debtor the chance to extend the payment period, pay less than the money owed, and pay for lowered interest rates. Payments will become more convenient, easy, and affordable. The creditors are often open for negotiations because they would prefer a portion of the owed money returned to them rather than nothing at all. However, this is usually applicable to unsecured debts in large amounts such as credit card debt and personal loans.

Others may opt to negotiate with their creditors without the help of experts thinking that they will end up spending more on top of their debt. Additionally, many believe that these programs are just a form of rip-offs, tricking debtors into believing that they have the upper hand when in fact they will only end up wasting more money. While this is true in some cases, this is usually the result of ending up in a company that tricks its clients by promising solutions that are too good to be true and pain-free.

Getting relief from debt is a complex matter that needs proficiency and commitment. To ensure that you can get legitimate debt relief help, you should look for a Licensed Insolvency Trustee. Licensed Insolvency Trustees (LIT) are professionals who are regulated by the federal government. Their main responsibility is to give advice and services to businesses and individuals like you who are dealing with financial problems to make the right decisions.

Licensed Insolvency Trustees are authorized insolvency professionals. They have undergone extensive education, training, and experience to administer government-regulated insolvency procedures. They are able to offer comprehensive advice for debt discharge. They will assist you and help you understand all the aspects of debt relief options. LITs are the only professionals qualified to administer insolvency proceedings. Moreover, their license is granted by the Office of the Superintendent of Bankruptcy (OSB).

Licensed Insolvency Trustees are federally regulated. This means that they must abide by the federal standards of the practice and are expected to follow the Code of Ethics for Trustees. In addition to this, the fees they require for their services are regulated. This way, you can be sure that you are not charged with extra fees. The first consultation is also free.

They are easy to find. You can check the Licensed Insolvency Trustee registry and look for trustee offices near you. You can find them anywhere in the country. It is also easy to locate a trustee by searching online.

Licensed Insolvency Trustees can deal with creditors. Having to face and negotiate with your lenders can be stressful and time-consuming. However, you do not have to go through the ordeal as the trustee can talk directly to your creditors after you decide for a debt settlement solution, along with your protection against the collection and legal actions.

What are the different personal debt relief programs?

Consumer Proposal

A consumer proposal is a legal procedure in which a licensed insolvency trustee will negotiate with your creditors for a payment settlement. All debts can be covered by the proposal with a few exemptions, including student loans, child support, and money borrowed through fraudulent means. The amount to be paid will be based on your ability to make payments and will only be a percentage or portion of the total amount of money owed. Unlike bankruptcy, you can keep your assets with a consumer proposal. The debt settlement will take up to five years. The repayment period is adjustable and will be lesser depending on your ability to pay. This will have a negative impact on your credit score up to 3 years after the completion of the proposal.

Bankruptcy

Bankruptcy is an option to be considered when you do not have the ability to pay your debt. Like a consumer proposal, declaring bankruptcy can cover all debts excluding student loans, child support, court-imposed penalties, and debt from fraud. Some of your assets (not all) will be taken to pay your debt. Your insolvency trustee will explain to you which of your assets you may lose or keep and administer this legal proceeding. When it is your first time to file for bankruptcy, the process will take up to 9 or 21 months and up to 35 months for the second bankruptcy. This period will depend on your surplus income. This debt relief solution will have a longer effect in your credit score which can take up to 7 to 14 years after completion.

Loan Consolidation

This is a debt relief program where you take up one loan to pay all of your outstanding. This way, your debt is “consolidated” and combined into one monthly payment. The main goal of debt consolidation is to manage your debt by reducing multiple payments and lowering interest rates. However, this will not reduce the total amount of money you owe. Loan consolidation is not for everyone and has its disadvantages. Nevertheless, with the right financial attitude and proper budgeting plan, a debt consolidation loan can also become an effective relief from debt.

Debt Counselling

Debt counselling is a debt relief program where you acquire the services of a credit counsellor or credit counselling agency to help you solve your financial issues. This involves one on one consultation or counselling sessions where you talk about your financial situation and money management. It is important to find a reputable credit counsellor to ensure that what you are getting is the best financial judgment or opinion.

Eliminate Your Debt with a Licensed Insolvency Trustee

If you are currently experiencing financial troubles and not sure how does debt relief work with the goal of figuring out the best way to be discharged from all of your debt, the first thing to do is to look for a Licensed Insolvency Trustee. Richard Killen and Associates, a Licensed Insolvency Trustee, have helped thousands of people resolve their financial problems by providing effective debt relief solutions.