1. Are you struggling to keep up with minimum
payments? Are your interest rates rising
continuously? If so, debt consolidation may be the
right debt relief solution for you. In Canada, debt
consolidation type programs have been used for
many years as a way to obtain debt relief without
having to file for bankruptcy. Debt consolidation
programs offered by debt relief/management
agencies are a very popular debt relief option.
These agencies can help you consolidate your
debts into one, easy payment so you can get out
of debt fast.
Chapter 13 Bankruptcy

2. What is Debt Consolidation? Debt consolidation involves combining your
unsecured debts such as unsecured personal loans, lines of credit, and credit
cards, into one lump sum, normally without incurring any penalties, interest or
very little interest When consolidating debt, you do not just make interest
payments to your creditors but you also pay off the principle amount of the
debt Participating in a debt consolidation plan gives you the ability to
eliminate your total unsecured debt owed to creditors and restore your credit
over time When you enroll in a program offered by a debt relief/management
agency, you will consolidate your debt into one single monthly payment plan
that is sent to the debt management agency The amount you pay is much less
than paying each debt individually that can be up to 70% less than what you
are currently paying which is why debt consolidation is so popular

3. Debt Consolidation Process The process of debt consolidation
involves working with a debt management/credit counselor from a debt
management/relief agency The debt counselor takes your information and
your list of debts and your creditors, and with your prior written consent,
contacts the creditors to inform them that you will be entering into debt
consolidation program The counselor will then negotiate with each creditor a
lower amount to repay Each creditor must approve the repayment plan
Once each creditor agrees, you will send one lump sum each month to the
debt management agency until the debt is paid off

4. Once you send your monthly payment to the agency, your debt counselor will
disburse the agreed upon payments to your creditors The monthly payment
you pay is applied to your total debt owed that contains little or no interest
Your debts get paid off faster, in less than 5 years Benefits Of Debt
Consolidation Participating in a debt consolidation program could be a very
important life decision This debt relief option has been used with great
success sby millions of people

5. The program gives you the ability to take advantage of our interest elimination
or reduction agreements As well, debt consolidation is an ideal alternative to
bankruptcy as your credit rating takes less of negative hit both in the short term
and long term In addition, you pay off 100% of the principle amount of the
debt which is much better for creditors Impact on your Credit When
you are participating in a debt management plan such as debt consolidation,
you are deemed an ‘R7’ This designation means you are in a voluntary
debt repayment program

6. As an R7, you are expected not to acquire any more unsecured credit When
you complete your debt consolidation plan, your R7 will change Some
creditors may start offering unsecured credit while others may wait for a certain
time period It all depends on each creditor’s policy

7. Chapter 13 Bankruptcy Debt Consolidation Eligibility To be eligible for
a debt consolidation program, you will have to speak to a debt management
counsellor A debt counselor from a debt management/counseling agency will
assess your ability to repay your debts in 5 years or less The preliminary
interview with the debt counselor will cover your financial situation such your
total unsecured debt, household expenses, and income Consultations are
typically free

8. Once approved, the debt management agency will take over and get the debt
consolidation process started Helping Canadians with DebtCare Canada
25 Sheppard Avenue West, Toronto, ON M2N 6S6 (416) 907-2582

9. Chapter 13 Bankruptcy