by admin | Uncategorized
Whether it is a credit card balance, a student loan, an auto loan, or a mortgage, most of us have some sort of debt. As long as you’re trying to pay it off, your debt should not concern you too much. On the other hand, if you’ve allowed debt to accumulate so much so that it’s having an effect on your health then you may need to mend your ways and quick. You’re here for a reason and that reason is finding out whether you have too much debt. How can do that? Let’s take a look.
Determining your debt-to-income ratio is one of the easiest ways to find out whether you have too much debt. The percentage of your monthly income that goes towards debt payment is referred to as your debt-to-income ratio. According to many financial experts, the average household debt in the United States is $10,000. Your debt is likely is likely to be somewhere around that figure. Following are some signs that you have too much debt.
All your money goes towards debt payment
As mentioned earlier, determining your debt-to-income ratio is a good way to find out whether you have too much debt. Basically, if most of your monthly income is going towards debt payment then there’s a good chance that you have too much debt. In an ideal situation, you should not spend more than 35% of your monthly income on debt payments. However, if you spend more than half of your monthly income on payment of debts then you, my friend, have too much debt.
You’re living a paycheck-to-paycheck lifestyle
If you’re living a paycheck-to-paycheck lifestyle then a major reason for it could be too much debt. Generally, people who have too much debt aren’t able to save any money. The reason for this simple: most of their monthly income is spent on debt payment and the remaining goes towards utilities/groceries. So, if you’re always without money at the end of each month, there’s a good chance that you have too much debt.
Your debt is causing you health problems
If your debt starts to cause health problems in you, it’s a good sign that you have too much debt. Too much debt can cause you to miss debt payments. When you’re behind on payments, creditors are likely to call you for collection. Thinking about getting a collection call from creditors can keep you awake at night and cause anxiety/stress in you. This is turn will cause health problems in you.
You’re denied new credit
Your credit rating significantly depends on how much debt you owe. A poor credit rating indicates that you have too much debt.
As seen above, too much credit can damage your credit rating. If you have too much debt then get in touch with a credit counselor to reduce your debt and improve your credit rating.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
There are multiple ways for you to reduce your debt and improve your credit rating including consolidation loans and consumer proposals. If you have more debt than you can handle then opting for a consumer proposal is a good choice. What is a consumer proposal and how can it help you to clear your debt? Let’s find out.
If you’re at a point where your debt continues to rise and making ends meets is as good as impossible then you have every right to be worried about your future. However, contrary to what you may think, paying off your debt is not impossible. It’s just that you haven’t found the right solution yet. So what’s the right solution for paying off your debt? If you guessed consumer proposal then full marks to you.
A consumer proposal is your best bet if you want to clear your debts without going bankrupt. Part of the Bankruptcy and Insolvency Act, a consumer proposal allows you to negotiate with creditors for debt reduction. Moreover, it allows you to spread the debt payment over several years. The debt payment you make each month will be based on your personal situation and your budget. Using consumer proposal, you can reduce your debts by up to 70%. However, it’s important to remember that only a licensed credit counselor or Insolvency Trustee can administer and file consumer proposals. After you sign up for consumer proposal, you’ll be required to make monthly payments to the trustee and not your creditors. This means that the creditors can no longer call you for collection after you sign up for consumer proposal. Following are some of the advantages of consumer proposal:
- You will be free of debts once your consumer proposal is completed
- Your debt interests will cease to exist
- You’ll have to make only one payment for your debts each month
- Your belongings will be safe
- Your creditors won’t be able to call you for collection or harass you
- You won’t have to worry about interruption of gas, telephone, or electricity services
- You can pay off your debt in secrecy
As seen above, there are many advantages of signing up for consumer proposal. However, it’s important that you respect your commitments and make timely payments after signing up for the aforementioned dent payment solution. Also, you will be deemed eligible for consumer proposal only after the following things happen:
- Initial meeting with the advisor
- Filing of the proposal
- Presentation of the proposal by the trustee to the creditors
- Response of creditors
- Acceptance of proposal
- Consultation sessions
- Official discharge
Generally, the consumer proposal is for a period of 5 years or 60 months. Consumer proposal is a great way to clear your debts. This is the reason credit counselors highly recommend it. To find out more about consumer proposals, get in touch with a credit counselors today.
