Debt consolidation services and bankruptcy services follow different approaches when it comes sot debt relief. Where debt consolidation helps you make loan repayments smoothly, bankruptcy helps you get to get rid of your debt obligations. So, before choosing an option, you should have a clear picture of both approaches in your mind. Let us discuss the mechanics of both approaches in detail.

Debt consolidation Alberta

The basic principle in debt consolidation is to take a new consolidation loan to pay previous multiple debts. The approach includes different options namely, home loan, equity loan, mortgage loan, secured loan, and unsecured bank loan. The best thing about this approach is that you can get out of your debt quickly. However, it works properly only when your consolidation loan is less than the interest rate of all your credit cards. Moreover, there are other risks associated with the approach. You need to qualify to get the loan which comes with strict prerequisites. You need to have solid collateral to get the consolidation loan.

Bankruptcy

Unlike debt consolidation, with bankruptcy services in Alberta , Calgary, Edmonton and Lloydminster you can get rid of your debts. Here, you surrender the assets in your position to be free from the debt obligations. The process is carried out by a Licensed Insolvency Trustee. Opting for personal bankruptcy will help you clear all your debt obligations contrary to debt consolidation where you need to refinance them. However, you need to remember that the bankruptcy will reflect in your credit report and stay there for a time span of 6 years. Moreover, you don’t have to qualify for bankruptcy it is a personal choice for all individuals.

Consumer proposal: A third option

With the help of a consumer proposal, you can consolidate all your debts without declaring bankruptcy. It is a kind of debt settlement that comes with legal binding. It gives you creditor protection and reduces the number of monthly payments. In this approach, you need to pay what you offer, rather than paying the total amount (Principal+ Interest).

The right choice

Opting for the right approach according to your situation is the key to settling your debt. According to the sources, the number of bankruptcies has decreased by 14.3% in Alberta as compared to the last year. All the processes can be a little overwhelming, so it is advised to seek professional advice before you move further with any approach. Every approach fits a certain situation and comes with its pros and cons. Bankruptcy eliminates your debt but reflects on your credit report. Consumer proposal comes with perks from both approaches but again it reflects on your credit report. Debt consolidation gives you a fresh start but monthly payments can add a lot of stress.

So, it is best to get on board with an expert company to find the right approach according to your circumstances. Credit720 has expertise in all the approaches and will help you throughout the whole journey. Contact us right away to get expert advice on your situation.