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Debt Relief

Essential Steps to Take After Being Denied Debt Relief PreApproval

Posted on April 13, 2023 by Ahsinkhan

Being turned down for debt relief preapproval as a Canadian with debt problems might be demoralizing. This does not, however, imply that you should give up on your financial objectives. 

It is important to realize that preapproval rejection is not the end of the road and that there are still a number of measures you may take to get back on track. This article will detail crucial actions to follow in Canada after receiving a rejection for debt relief preapproval.

✅Review Your Credit Report

Negative information on a person’s credit report is one of the key reasons why preapproval for debt relief is denied. Lenders use your credit report, which is a record of your credit history, to determine how creditworthy you are. 

It is crucial to check your credit record for any inaccuracies or unfavorable information that can be harming your credit score if you have been denied debt relief preapproval. Equifax or TransUnion, Canada’s two largest credit bureaus, both offer free copies of your credit reports. Once you have your credit report, thoroughly analyze it, and then challenge any errors or inaccuracies you discover.

✅Learn About Your Debt to Income Ratio

When choosing whether to approve your application for debt relief, lenders also take into account your debt-to-income (DTI) ratio. This ratio calculates the difference between your monthly income and your monthly debt payments. If your DTI ratio is too high, you might not be granted preapproval for debt relief. Add together all of your monthly debt payments and divide by your total monthly income to determine your DTI ratio. Before reapplying for debt relief, you might need to settle some of your debts if your DTI ratio is greater than 40%.

✅Investigate Other Debt Relief Alternatives

It might be time to look into alternative debt relief options if your request for debt relief preapproval was rejected. Canada offers a number of debt relief options, including consumer proposals, bankruptcy, debt management, and debt consolidation. Before choosing one of these possibilities, it’s necessary to explore and comprehend each one because each one has pros and downsides of its own. To better understand your debt relief alternatives and select the one that will work best for your circumstances, you might also wish to speak with a licensed insolvency trustee.

✅Establish a Budget

The first step in managing your money and getting back on track after being rejected for debt relief preapproval is to create a budget. Keeping track of your income and costs will help you find areas where you may cut back on spending. It also enables you to prioritize your debt repayments and keep up with your financial obligations. Include all of your monthly expenses in your budget, including rent or mortgage, utilities, food, travel, and entertainment. Don’t forget to set aside some cash for savings and unexpected costs.

✅Reduce Your Expenses

A great method to increase the amount of money you have available to pay off debt and improve your financial status is to cut back on your spending. Decide where you can make savings, such as on subscriptions, cable TV, and eating out. In order to lower your interest rates or monthly payments, you can also bargain with your creditors. You can lower your DTI ratio and have more money available to pay off debts by reducing your expenses.

✅Overcoming Debt Denial in Canada

Don’t give up if you’re battling with debt in Canada and have been told that preapproval for debt relief is not possible. You can still take action to regain momentum and reach your financial objectives.

Check your credit report first for any mistakes or unfavorable information that might be harming your credit score. Recognize your debt-to-income ratio and look into various Debt Relief Programs in Ontario choices like bankruptcy, debt management, consumer proposals, and debt consolidation. Make a budget and reduce your spending to raise extra cash for debt repayment. You may solve your debt problems and get out of debt if you work hard and are persistent.

“Never forget that National Debt Relief is here for you at every turn.”

To find out more, call them right away. (1-800-300-9550)

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