If you're dealing with debt, consolidation can be a smart way to get you out of trouble. However, in some cases, you may not be eligible for debt consolidation. In this article, Bernier & Associates, a licensed insolvency trustee in Ottawa and Gatineau, explains everything you need to know about debt consolidation and the reasons for a potential refusal.
Debt Consolidation: What is it?
Debt consolidation is a legal process that allows you to combine all your credit and debts into a single loan. This makes it easier to manage your debts and reduce your monthly payments. If you have any doubts, a licensed insolvency trustee will be able to advise you on the best course of action to take if you are considering debt consolidation.
Why is Your Debt Consolidation Likely to be Refused?
Here are some reasons that may explain a potential refusal:
Insufficient Credit Report – If your payment history shows recurring late payments, your credit score can be negatively affected.
A Lack of Credit History – If you've never used credit cards or signed a loan, banks will have a hard time assessing your ability to repay.
Insufficient Funds – If your income is unstable or insufficient, this may also contribute to a refusal to consolidate your debt.
A High Debt Ratio – If this ratio reflects an amount of debt that is too high compared to your income, you may lose your eligibility to obtain a debt consolidation.
What to Do If You Are Refused Debt Consolidation?
Has your debt consolidation application been denied? As frustrating as it may be, there are still options you can consider to help you settle your debts.
For example, you could try negotiating directly with your creditors to try and obtain an alternative repayment solution. Consider meeting with a bankruptcy trustee; they will be able to analyze your financial situation and suggest the best solutions to adopt.
The Role of a Licensed Insolvency Trustee in Managing Your Debt Consolidation
There are several advantages to using the services of a trustee to manage your debt consolidation:
Your trustee has the expertise and knowledge to help you effectively.
Your trustee will exercise discretion and respect your confidentiality.
In financial situations that can often be tricky, your trustee will act objectively to help you better understand how to proceed.
Your trustee can facilitate negotiations with your creditors.
A trustee can also help you manage your budget more efficiently.
When consolidating debts, your trustee will also offer you legal protection.
Reach Out to a Licensed Insolvency Trustee
Bernier & Associates provides professional debt and financial management services to individual and commercial clients. Contact us today for a free consultation.