Do you feel like you’re living to pay down debt?

Do the interest costs make it feel like you’ll never pay it off?

When you’ve reached this point, it can be difficult to empower yourself to find the best solution that suits your unique financial needs.

Fortunately, Frederick & Company is here to help you understand your options so you can move forward in a way that works for you, your budget, and your family.

Are you ready to get started? Let’s look at when you need help with debt and what you can do to find financial freedom:

Signs You Need Help With Your Debt

While there’s nothing wrong with having some debt, it can be hard to manage at times. And you may not even know you’re in a tough spot until it’s too late!

To help you begin to manage your debt, here are some signs that you may need help:

You Can Only Make Your Minimum Payments

Minimum payments are relatively low, so it’s easy to assume that you can take care of your debts by making them each month.

However, they do nothing to pay down the balance of your debt. When you only pay your minimum obligation, you are merely covering the cost of interest and not paying down the amount owed.

You’ll end up staying in debt if you can’t make more than the minimum payment.

You Rely on Your Credit Card on a Day-to-Day Basis

Credit cards are best suited for emergency situations or purchases you can pay off immediately.

A good rule of thumb is that you should only buy things on credit if you can afford them currently. This isn’t always possible with emergency expenses, but generally speaking, you should always ask yourself this when making purchases.

Otherwise, using your credit card for regular living expenses is not sustainable, and you will continue to struggle with debt.

You Pay Off Debts With Other Loans or Credit Cards

You’ll know you need help with your debts when you are using one form of credit to pay for another on a regular basis.

While it is helpful to pay down higher-interest debts with lower-interest ones, you’ll remain in debt if you continue using your high-interest accounts.

You Rely on Payday Loans

Payday loans are useful to get you out of a bind between paydays, but they can quickly snowball into unmanageable debt!

Payday loans have very high-interest rates and these types of debts can easily spiral out of control. 

It’s easy to get into the trap of using payday loans to pay another payday loan(s), and this can lead to multiple loans with enormous annual interest rates.It is also difficult to get out from under the obligation. 

You’re Spending 20% Or More Of Your Income On Your Debts

Spending 20% or more of your monthly income to pay off your debts is a sign of a serious problem: You have more debt than you can handle.

Thankfully, programs and services can help, such as debt consolidation and consumer proposals in the greater Edmonton area.

A great starting point is drafting a written budget to increase your awareness of where you are spending your hard-earned money. 

Options for Debt Consolidation in Edmonton

Speaking to a licensed insolvency trustee is your first step to managing and conquering your debt!

Our team at Frederick & Company Ltd. is dedicated to finding the best option for you and your financial situation by guiding you toward the most appropriate solution:

Debt Consolidation

A consolidation loan combines all of your debt into one loan and one payment. This can help you manage and organize your payments and pay down your debt quicker than struggling with multiple monthly payments.

The first hurdle for consolidation loans is qualifying for one. Missed payments and a low credit score may automatically disqualify you and it’s not uncommon that banks will only consolidate debts owing to their institution. Banks will not typically include debts to Canada Revenue Agency as well in consolidation loans as well.

In order to determine if a debt consolidation loan is right for you, it’s important to understand the cost of borrowing, which is the amount of interest you will pay during the term of the loan. We can help you calculate this cost of borrowing. 

You also need to consider how long it will take you to pay back the loan.

Some advantages of consolidation loans include decreasing your interest rate, having an easier time tracking your debt, and keeping a good credit score.

Consumer Proposals

Consumer proposals in Edmonton involve submitting an offer to your creditors in order to settle your unsecured debts. In the end, you will pay back only a portion of your total debt by making predictable and affordable monthly payments.

These payments are based on your income and assets and will allow you to make a lump sum payment into the proposal in order to resolve your debts.

The cost of a consumer proposal is calculated is not based on how much you owe. Instead, it is based on what you can pay in relation to your income, expenses, non-exempt assets (such as household goods, life insurance, vehicles, etc.), and the number of people in your household.

Once a consumer proposal is paid off, you are free from that debt and protected from creditors – and it only affects your credit bureau for three years after completion.

Orderly Payment of Debts

Unlike a consumer proposal which is a settlement, an Orderly Payment of Debts (OPD) consolidates your debts into installment payments with a 5% interest charge for up to 5 years. In the end, you pay back everything that is owed.

An OPD can be a more affordable option for those with a small unsecured debt load. This is a favorable option if you can afford to pay your debts in full but have trouble managing your finances.

To determine if this is the right choice for you, our team will take a look at your debts owing to see if this is a more cost-effective option.

Informal Settlements

Informal settlements are a sort of DIY method of tackling your debt. You personally contact your creditors and offer a settlement.

However, a credit or debt counseling company can also do this for you!

You will have to negotiate with each creditor about your interest rates, payment amounts, and repayment schedule. Agreements are not legally binding, so your creditors have no legal obligation to honor the agreement.

Choosing an informal settlement depends entirely on the number of creditors you have and the amount you owe to them. The fewer creditors you have, the more advantageous an informal settlement will be.

Let Us Help You Get Back in the Black!

Here at Frederick & Company Ltd., we believe anything is possible – especially paying off your debts!

Imagine yourself on a path to enjoying financial freedom without stressing about your next debt payment.

We can help you find a plan that fits your priorities and best suits your financial situation.

Contact us today!