Particularly for the benefit of non-native English speaking Canadians and their welcome visitors, this positive connotation is easy to explain. And in the context of this online article which talks about fresh, legal opportunities to help distressed consumers drastically reduce and eliminate outstanding debts, a positive extension is being made.
When you engage in a consolidation exercise, you are combining a number of other practical exercises or goals. You may have heard this term being used a lot in business or financial-speak, particularly when large-scale companies release their quarterly to annual financial statements for the benefit of their shareholders and associates. But it is the term; debt consolidation to which we must now turn. It needs further explanation in the context of today’s settings.
Up until recently, this term debt consolidation – has caused many some trepidation. That is mainly because those who were highly indebted at any point in their lives seemed to enter into another vicious cycle of having to commit themselves to extensive debt payments with high interest rates. What happened was that consumers allowed themselves to become victims of a debt consolidation process that should have been working in their favor.
While they were able to fetch the consolidation loan, they did not manage it very well. The money that should have gone towards settling all outstanding debts was simply placed into other unnecessary areas such as purchasing unaffordable luxuries. The cost overrun from this irresponsible process led to further and higher debts. But today, the debt consolidation process, properly and legally managed, is anything but.
Ahead of time before any loan is granted, terms and conditions are firmly set in motion. The conditions affixed to the debt consolidation loan agreement strictly stipulate that the consolidation loan will only be utilized for settling the outstanding debts. And while this new and helpful loan is in duration, the condition is also that highly indebted customers do not enter into any new loan or credit deals. A smartly utilized consolidation loan can also be used to fund a new business and/or investments.
Today’s highly indebted consumers are highly encouraged, as it were. They are encouraged to engage with the loan facilitators who are qualified on several levels. The loan facilitators have legal qualifications and financial accreditations. First and foremost, during the consultation phase, the debt consolidation administrator will be advising his or her client fully on his or her rights. This early foray with the debt management agents often present distressed customers with a few pleasant surprises. One popular development is that they are no longer obliged to settle a long outstanding loan. This loan is also written off as they say. Creditors affected by this welcome development are notified. They are also notified on legally mandated interest rates and are often compelled to accept a new agreement which favors the consumer with much lower interest rates.
And sometimes these interest rates are waived altogether and a new, reduced settlement amount is agreed to.