When your debts become too large, it is in your interest to ask for help. Deciding what kind of help you need can be complicated, especially if you take a look at all the options that exist. Depending on the types of debt you have and your current financial situation, a debt management program might be exactly what you need to deal with your debts and move in the right direction. Let’s see in more detail what a program like this is.
What to expect
Unlike more drastic forms of debt relief, such as a consumer proposal or bankruptcy, a debt management program is not a legal action. Instead of working with a licensed insolvency lawyer or trustee, you will be dealing with a certified credit counselor who will assist you throughout the process. Your main goal when meeting your advisor is to provide as much information as possible about your finances. The more information he has, the more he can help you. Your credit advisor:
- Determine exactly how much money you owe and to whom
- You will create a personalized budget to help you in your process
- Negotiate with your creditors in the hope of finding common ground in repaying your debts
The bus of a debt management program is to consolidate your eligible debts into a single, more manageable monthly payment. The credit counselor with whom you will be dealing will negotiate, on your behalf, with your creditors and lenders to reduce your interest rates and eliminate penalties that you may have accumulated. In this way, you can continue to pay for your necessities while paying off your debts. In most cases, people can get out of debt fast enough and save on interest charges while making easy-to-manage monthly payments.
What types of debt can be consolidated with a debt management program?
A debt management program is a great option for many consumers who have trouble keeping their debts in order. That being said, not all types of debt can be included in such a program.
Seeking the help of a professional and making the decision to join a debt management program is not a decision that should be taken lightly. That’s why we think it’s important for you to know before making your final decisions. For information and to help you make the right choices, here is a complete list of debts that can be consolidated with a debt management program.
Credit card debt
A credit card debt is not a secured debt, which means it can be included in a debt management program. In fact, credit card debt is one of the most common reasons why consumers choose this form of debt relief.
Retail Store Credit Card Debt
As with other credit cards, retail credit cards are also eligible for a debt management program.
Unsecured personal loan debt
Personal loans that are not guaranteed, ie when you originally applied for the loan, you did not have to put any form of collateral, such as a vehicle, can also be included in a management program debts.
Unsecured Credit Union Loans and Credit Card Debts
If you have received an unsecured loan from a Caisse Populaire or you have accumulated too much credit card debt on a credit card, it is possible that these two debts may be included in your debt management program.
Automobile restitution debt
If your vehicle was repossessed because you could no longer make your payments, you could include that debt in a debt management program.
A debt that has been created by a gas card is also eligible to be included in a debt management program.
Non-government student loan debt
If you have private or non-government insured student loan debts that are causing you financial stress, a debt management program might be a good option for you.
Previous cellular bills
If you have unpaid cellular bills and no longer use the same service, you may be able to include this debt in a debt management program.
Previous service accounts
Like a past cell phone bill, a utility bill that you no longer use can also be included in a debt management program.
All medical bills are not eligible in a debt consolidation program but some are. If this is the main reason you are considering a debt management program, we recommend that you first seek the advice of a credit counselor.
Make the right choice for you
You should know that creditors and lenders are not required by law to cooperate with your credit counselor. Therefore, the above list should be used only as a reference tool. It is possible that all your unsecured debts may be included in your debt management program. That being said, such a program is the best option for many Canadians who are facing a lot of debt that they can not pay back. If you are currently looking for a solution to relieve yourself of the burden of your debts, we can help you by putting you in touch with a credit counselor in your area.