There are danger signs associated with being in debt that indicate it may be time to look at some kind of financial counseling such as Bankruptcy Toronto, debt consolidation Toronto or even declaring bankruptcy. Household debt has never been higher and it can get out of control easily.

One sign of trouble is using credit cards to purchase everyday necessities such as groceries. Another is only being able to make the absolute minimum payment on your total credit card balance. And another would definitely be the appearance of collection agencies making harassing phone calls on behalf of creditors.

If one or more of these danger signs is present, debt consolidation, credit counseling or perhaps even bankruptcy should be considered. There is any number of services or agencies readily available to help people sort out these kinds of financial scenarios.

A bank or private lender can consolidate unsecured debts, such as credit card balances or personal loans. This can result in a single manageable monthly payment over a long period of time. But they can be difficult to qualify for if those danger signs are already in evidence. By then a personal credit rating might already be compromised and weakened by late payments.

A credit counselor will be able to decide whether it is too late for debt consolidation and time for another approach such as consumer proposals or declaring bankruptcy.

A consumer proposal is when special terms are negotiated with creditors. A credit counselor can approach the creditors and file the requisite documents if they agree to the proposal. Interest on outstanding balances may be waived or monthly minimums might be lowered in an effort to have the debtor honor their commitment rather than go bankrupt and write it off. Most creditors will agree to a consumer proposal rather than risk losing the entire amount owed.

Bankruptcy is declared when the debtor has no hope of making payments as they become due. It requires meeting with a Trustee who files the bankruptcy documents with the government and oversees the terms of the bankruptcy agreement. Those terms may require the debtor to fulfill certain duties such as attending meetings or credit counseling sessions. All debt must be dealt with but a person is allowed to keep their possessions and if their wages are being garnished, it will stop. Any assets are divvied up between creditors. It takes about nine months to work through the bankruptcy and then it is discharged.

It can take a lot longer however, to rebuild a good credit rating after a bankruptcy. So whatever option is decided upon, it should be chosen after careful consideration and with the guidance of a qualified credit counselor or financial advisor. These kinds of experts can be found online, in the Yellow Pages or just by asking around. Problem debt is a common dilemma and many people have had to resort to debt consolidation Toronto, consumer proposals or bankruptcy at some point in their lives. It is almost never too late to address the problem. But better sooner rather than later.

Author Bio: For the best advice on creditor negotiation and personal Bankruptcy Markham, Ontario residents all over the Toronto metro area trust Killen Landau & Associates.

Category: Finances
Keywords: loans,financial services,bankruptcy,customer service,financial security,debt,interests,principal