Use your home equity to reduce credit card debt
Many Canadians are taking advantage of refinancing some of the equity in their mortgage to reduce their credit card debt. Why pay high interest rates on your bank’s credit card debt when you can add that debt to your mortgage and pay a much lower interest rate! One important part of a strategy is knowing “good debt” from “bad debt”. A well-planned mortgage can help you turn those bad debts into good debts and get them out of the way.
- Consolidate high interest rate credit cards to one lower rate.
- Save money and increase cash flow.
- Reduce stress knowing that your financial situation is now manageable.
Debt Management Plan
If you can not qualify for a loan, you may be able to succeed in eliminating your debt by using a debt management plan. With this type of plan, you contact all of your creditors and speak to them about your intention to pay off their debt. You let them know exactly how much you can afford to pay them each month and ask them to reduce their interest rate. In most cases, if you are late on your payments or are at risk of bankruptcy, they will accommodate your request.
You do this with all of your creditors and then send them all the same amount every month. Eventually your debt will be eliminated and you can get back on track. You are still paying off all of your debts with this method, but you will usually be able to get an interest rate reduction.
We offer Consumer Proposal, Bankruptcy and Insolvency Act service in over 35 locations across Ontario & Vancouver. We can help with debt relief ranging from credit card debt to tax debt. Ask me about our unique debt management solution.
Another option that you may have is debt settlement. With this option, you negotiate a cash settlement with your creditors. They will reduce the amount that you owe them in return for a one-time cash payment. For this method to work, you need to have some cash on hand already. Therefore, it may eliminate many people that could implement this strategy.