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Ask the Debt Consolidation Expert - Darrell Pauls

Updated: Sep 29

Visit our website at www.4pillars.ca


October 2020


Often we are asked if a consumer proposal is the same as claiming bankruptcy. I would like to address this question in today’s article and hopefully help you to understand what the difference is and how a consumer proposal can be a better option for those people in financial trouble.


Bankruptcy is a tool that can be used for consumers who have uncontrollable debt and have absolutely no other options. It is a court process in which consumer debts can either be wiped out or repaid under the protection of the bankruptcy court. In a bankruptcy regular payments are made in the amount agreed upon. You have to give full disclosure of your income and report to a bankruptcy Trustee every month until you are discharged from your bankruptcy. A Bankruptcy can last up to 21 months if it is the first time a person claimed bankruptcy and up to 36 months for the 2nd time they are bankrupt.


A consumer proposal is a legal process in which a debtor can strike a deal with their creditors to pay back a portion of what they owe without interest or penalty. The debtor’s unsecured debts are then grouped together into one monthly payment with the repayment period lasting up to 60 months. In a consumer proposal you will need to also give full disclosure of your income and assets but you do not need to file reports on a monthly basis. A consumer proposal can be a helpful tool to use if a person is severely struggling financially and does not wish to claim bankruptcy.


September 2020


Debt Help and Debt Settlement with 4 Pillars


4 Pillars is a Canadian owned company and has been in business for over 14 years. 4 Pillars Consulting Group has helped 10’s of thousands of people in Canada restructure over a billion dollars of debt since its founding. We work only for our clients and have no obligations to the creditors unlike many other debt help businesses. We work to help our clients restructure debt mainly representing their interests when filing a consumer proposal with licensed Trustees. We represent our clients during the restructuring to help them get the lowest payment plan that we can and then we take our clients through the most comprehensive credit rebuilding plan in Canada to reduce the impact on the credit rating. The client’s best interest is our highest priority.

Who can you help with their debt?

If you are struggling to keep up with your payments, have missed payments or have collection agencies calling, then we can help you. There are several different options available to help our clients to get out of debt and we go through every unique situation and suggest the best course of action for you.


What does the free consultation look like?

An initial consultation is usually around an hour long. We can either have your consultation on the phone or in the office, whichever is most convenient for you. We will ask you questions about your financial situation and give you information on the best debt help options for you.


How much can you reduce my debt?

Often our client’s debts can be reduced by up to 80%, but each situation is unique and your plan will depend on your circumstances. On top of that, 97% of our clients complete the plans we make for them and become debt free which we believe is the highest in our industry.

August 2020


How do you know if a consolidation loan is right for you?


If you have 2 or more debts, such as credit cards, pay day loans, a car loan etc., have good credit and are able to make the monthly payments then a consolidation could be the right option for you. If you are not able meet the criteria for a consolidation loan there are other options available. At 4 Pillars Medicine Hat we work for our clients not their creditors, so we always have our client’s best interest in mind. If you would like to learn more about consolidation loans or other ways of clearing up your debt, give us a call at 403-332-7361.



July 2020


Is Debt Consolidation the right debt help tool for you?

Most often a handyman will wear a tool belt that carries the main tools that he will need to repair fences, tighten screws, a measuring tape and pencil to check and double check measurements and a hammer with nails to make sure items are fastened properly. Just like the handyman has several tools to fix a problem, there are several “tools” available to fix a financial problem. If you are experiencing financial trouble and are in need of debt help, which tool is best for your problem? Could it be debt consolidation? Keep reading to find out.


What debt consolidation is and how does it work in Canada?

Debt consolidation, in simple terms, is taking out one larger loan to pay out several smaller loans. Why would we do this? When a person has a lot of high interest debt such as credit cards or pay day loans and only makes minimum payments or maybe slightly more, it can be difficult to pay the debt completely off. When most of your payment goes directly to the interest then it will take a long time to see the principle balance go down. Consolidation loans most often have lower interest rates than credit cards and pay day loans therefore more of your money will go toward the principal. A consolidation loan will also have fixed payments, which means that you will be required to make the same payment each month of your loans term. In order to consolidate your debts you will have to qualify for the consolidation loan. To make sure that you qualify your bank will need proof of your income. They will also need to take a look at your credit score. If your credit score is too low you may not qualify or you could qualify with a higher interest rate. If the interest rate is not low enough though, it may not be beneficial for you to use a consolidation loan to help you with your debt.

June 2020


How can debt consolidation help my debt?


Do you have a difficult time making all of your payments? Do you find yourself not having enough money at the end of the day for food or necessities because of your debts? Are you only making the minimum interest payments and not paying down any of your principle? If you are trying to pay down several consumer debts, a consolidation loan may be an option that could work for you.


A consolidation loan is when a bank or financial institution gives you money to pay off all of your outstanding consumer debts and consolidate them into one big loan. There are a lot of reasons why consolidating your debts can be beneficial to you in paying off your debt.


A consolidation loan is a way to pay off your debt faster. High interest rates mean that more of your money each month is going towards the interest rather than the principle amount. If you can consolidate all that you owe into a low interest loan, then more of your money goes towards your actual loan and it will be paid off much quicker than before.


If you find it difficult to remember which bills are due on what day or find yourself stressed because you have so many different loans and it is confusing to figure out which one to pay first, then having only one payment would be beneficial to you. A consolidation loan will help simplify your debt repayment plan.


When applying for a consolidation loan, a good credit rating is essential. You also need to have the income needed to make the monthly payments. If you have a poor credit rating and do not qualify for a consolidation loan we still may be able to help you. Give us a call at 4 Pillars to set up a free consultation to look into all of the options available for you.


May 2020

Do You Need Debt Help? Right now more than ever people are finding themselves in financial situations that they never expected to be in. Wages are lost, bills are still coming in and debt is piling up. Most people in North America have some form of debt such as a mortgage, vehicle loan, credit cards or payday loans. How can you know though if you have borrowed too much and have got in too deep? First Things First The first step in knowing if you need debt help or debt relief is knowing how much you owe. Add up all of the debt that you owe. Make sure you include your mortgage, vehicle loan, student loans, payday loans as well as personal loans. It is important to know your starting point so that you can track your progress and see how far you have come in the end. Secondly, add up your monthly payments for your loans and the minimums that you pay each month on your credit cards or line of credit. Next, figure out what your gross income is in your household for one month. If your income changes each month then take an average over the previous 6 months. Take your total debt payment amount and divide your total income into it to get your debt to income ratio. For example if your total income was $5000 and your total monthly debt payment was $2000 your equation will look like this: $2000/$5000 = 40% What is the healthy range? A healthy debt to income ratio is somewhere between 0-36%. If you are above that range, you are beginning to enter the unsafe zone. Yes, you may be able to make your minimum payments still, but by just making the minimum payments it can take you years longer to pay off a small loan. If you are in the range of 37-49%, it might be in your best interest to figure out a debt settlement plan before your debt gets out of hand. If your ratio is above 50% then you need serious debt help immediately. If you would like to learn more about debt settlement or just need debt help, give us a call at 4 Pillars. We offer a free one hour consultation by phone. We will go through your financial situation with you and present you with the best options for you. There is no pressure and we always look out for your best interests.

April 2020


Help! My credit card debt is out of control! Credit cards can be a great tool, if you know how to use them wisely. Unfortunately it can be all too easy to fall into the trap of buying more than you can afford and end up making minimum payments only, while never really paying it off. If you need help with your credit card debts, keep reading to learn how to break the heavy chain of credit card debts and learn how to use credit cards responsibly. Stop Making Purchases with Your Credit Cards The first thing you need to do is stop charging on your credit cards. If you find yourself always going back to the credit card, then remove it from your wallet. If it isn’t there, then you can’t use it. Pay More than the Minimum If you are just making your minimum payments, you would be surprised at how many years it would take to pay off your balance. Even if you can only do a little more than the minimum it will make an impact. Spend Responsibly Make a realistic budget and stick with it. Keep track of how much you are spending and what it is for. Try to eliminate the things that are wants and not needs, such as eating out in restaurants or expensive new clothes. If you can save some money in one area, you can then apply that money to your debts, paying them off faster. Pay Off Your Highest Interest Debt First It makes a lot of sense to pay off the debt with the highest interest rate first and then the second and third and so on. That department store credit card that has 30% interest is costing you a lot more money than the 18% credit card. If you pay off the higher interest card first, it will free up more money to pay towards the next card and continue to make it easier to pay off your debts. Some people prefer to pay off the smallest balance first. It can make you feel good and motivate you to keep going when you see a zero balance on a credit card statement. If you feel like there is no way that you can take care of all of your debt on your own and you need help, then contact our debt relief specialists at 4 Pillars. We offer free consultations and will go over your current situation with you and give you options to help you on the road to debt free living.




March 2020


4 Reasons to Avoid Bankruptcy

Today we are going to take a look at 4 reasons why you should avoid bankruptcy if at all possible.


1. The emotional stress that comes from a bankruptcy can be overwhelming. Knowing that you have hit rock bottom can be a tough blow on a person’s pride. People who claim bankruptcy often feel like they have failed and feel a strong sense of guilt. The embarrassment of admitting your failures to family and friends can be difficult to overcome.


2. Filing for bankruptcy will affect your credit score for a long time. Canada’s largest credit bureau, Equifax, keeps the record of your bankruptcy on your file for 6 years after the date of discharge which is when you make your last payment. Not just 6 years after you filed for bankruptcy, but 6 years after your final payment. With a bankruptcy on your credit bureau report, most lenders will not even consider lending money to you. It is difficult to re-establish your credit rating after a bankruptcy.


3. More and more employers are now checking credit reports before making their hiring decisions. Employers want to know that you can handle your own finances before giving you responsibility to handle theirs. Filing a bankruptcy may seem like the right thing to do now, but consider your current job and your future. If you lost your job and needed to find a new one, would you need to have a clear record and a good credit score?


4. You could lose some of your assets. Some of your assets may be protected, but not all of them are exempt in a bankruptcy. If you have assets that are not protected, you will have to surrender them to be sold and the funds from the sale will be distributed among your creditors.


Sometimes it seems as though bankruptcy is your only option. If you feel this way, know that there may be other options available to you such as filing a consumer proposal. If you would like to learn more about bankruptcy or restructuring your debt through a consumer proposal, give 4 Pillars a call at 403-332-7361.

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