The payday loan love affair is over (or should be).

It’s February and the month has been aglow with talk of love and romance. However, one relationship that is waning in appeal (and rightly so) is Canadians’ love affair with payday loans.

These small, short-term unsecured loans are rarely linked to a repayment date aligned to a borrower’s payday—but that was the initial concept: If you are short of money and can repay a loan once you get paid . . . then come on down!

Sometimes these loans are called ‘cash advances’ and they typically rely on the borrower having previous payroll and employment records.

Payday loans may seem attractive to some consumers in need of ready cash but consider that for a $15 charge on a $100 14-day payday loan the annual percentage rate is over 391%*!

In addition to being expensive, payday loans are also a short-sighted way to address financial troubles. If you are regularly strapped for cash and have maxed out other (more cost-effective) sources of credit it may be a sign that you are carrying an unreasonable and unmanageable debt load.

Payday loans will not help ease your debt problems; they are an expensive way to just keep your head above water. Bottom line, if you are struggling to make ends meet and drowning in debt repayment, it’s time to look at available options to solve your problems—for the long term.

You might consider a consolidation loan (to address your debts), but you may not qualify because of your debt ratio or impacted credit score.

One popular option is a Consumer Proposal. It focuses on what you are capable of paying (not just what you owe)—this could be 75% less than the total amount you owe. You can qualify for a Consumer Proposal if you owe up to $250,000 of non-mortgage debt—and most debts can be covered. This essentially allows you a fresh start.

With the guidance of a Trustee you negotiate to pay creditors all, or a portion, of your debt over a specific time period or to extend the time allowed to pay the entire debt. You need the majority of creditors to agree to the proposal—then all unsecured creditors are bound by it.

It’s time to break off the unsatisfying relationship with payday loans and develop a sound financial future.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Alberta 310 8888. www.gt.alger.ca

*Estimate, actual amounts may vary.

Determined to deal with your unmanageable debt load? Then consider a consumer proposal.

Maybe it’s the credit card bills clearly itemizing unplanned holiday spending. Or, perhaps your New Year’s resolution is to finally deal with your debt. Whatever your motivation, it’s important to know all of your options.

One popular option is a Consumer Proposal – which has become favoured over bankruptcy. A Consumer Proposal is a way to address debt but not negatively ‘impact’ yourself – and your assets and credit rating – as much as you would through a bankruptcy.

A Consumer Proposal focuses on what you are capable of paying (not just what you owe)—this could be 75% less than the total amount you owe. You can qualify for a Consumer Proposal if you owe up to $250,000 of non-mortgage debt—and most debts can be covered. This essentially allows you a fresh start.

With the guidance of a Trustee you negotiate to pay creditors all, or a portion, of your debt over a specific time period or to extend the time allowed to pay the entire debt. You need the majority of creditors to agree to the proposal—then all unsecured creditors are bound by it.

With a Consumer Proposal you keep control of your assets and it has shorter-term – and less significant – impact on your credit rating than bankruptcy.

For example, if you make a Consumer Proposal your credit score will be affected for three years after you have paid the full amount promised to your creditors in your Proposal. In contrast, although it varies by credit agency—in general, your credit score would be affected for six years after discharge for a first bankruptcy and for 14 years for a second bankruptcy.

Keep in mind too that some consumers cannot qualify for a consolidation loan (to address their debts), whether because of their debt ratio or their impacted credit score. With a Consumer Proposal it is not about ‘qualifying’. This solution is seen as a consolidation of your debt and a repayment plan—based on your current circumstances.

Avoiding bankruptcy may be important to you too. Your profession or employer may review your credit history and view a bankruptcy as unfavourable. Also, if you are a director of an incorporated company you cannot legally continue to perform this duty if you have filed for bankruptcy.

Not to mention, sometimes it can be a psychological thing—people in general don’t like the ‘b’ word (bankruptcy). A Consumer Proposal provides a solid solution to resolving debt issues without committing to bankruptcy.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Alberta 310 8888.