Mortgage related questions

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Will it affect my mortgage renewal?

If you are in any of our debt relief plans you can continue to make your mortgage payments.  And more importantly, you can continue to stay in your home.   As long as you are up to date on your mortgage payments, your mortgage lender will usually have no problems whatsoever renewing your mortgage.

Can Mortgages be included in a debt reduction plan?

Mortgages are secured by the property itself.  Our debt reduction plans focus on unsecured debts.  A foreclosure is the result of not meeting your mortgage obligations.  Our debt relief plans allow you to continue making your mortgage payments while significantly reducing your unsecured debts.

What are my options if I wanted to get out of my mortgage contract?

Yes, there are options based on the property value, the equity available, and the number of payments in arrears.

Do you provide 2nd Mortgages?

Yes.  A 2nd mortgage can make sense for certain clients.  We have access to exclusive lenders and brokers who can help you.

When and how can I apply for a new mortgage after the debt relief program?

To qualify for a mortgage your income must support both the current debt payments and the new mortgage payments.  There are 3 factors that affect the ability for someone to obtain a mortgage:  credit rating, income, and the down payment.  After going through our restructuring program, you are usually in a better position to meet the debt service ratios which mortgage lenders use to determine your eligibility.  With a significant reduction in debt, this will increase your cash flow making it easier to save for your down payment.  Our credit rebuilding program is tailored to meet the CMHC mortgage lending guidelines.  A well-executed debt restructuring plan can make home ownership a reality much sooner.

I am in foreclosure, can you help me?

It depends on what you are looking for.  If you are looking to get a loan to pay the foreclosure amount it will be very difficult to find a lender if you don’t have the equity.  However, if you feel you have the income to support this, then this may become a viable option as we can look to reduce your other debts through a debt restructuring plan.  If you are looking for protection from the creditors and a plan to deal with any short fall, then we can certainly help you.

Can the creditors put a lien on my property?

Creditors can put a lien on your property once they have obtained a judgement through the courts.  This can be stopped if you deal with the debt early in the process.

Can a Home Equity Line of Credit (HELOC) be included in an debt relief program?

A HELOC is different from a regular line of credit because you have pledged your house as security.  As a result, a HELOC can not be included in a debt relief program.  However, we have solutions for certain clients in these situations.  We look forward to discuss this further in one of our FREE consultations.

Common Myths

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In Bankruptcy, I don’t have to pay anything back. So, why isn’t that better?

In bankruptcy, what you pay back is calculated based on your income and your assets, which is determined by bankruptcy and insolvency legislation.  Every bankruptcy trustee has a minimum fee which must be paid.  You will also have to complete monthly income and expense reports during the period of bankruptcy which could require that you pay more and for a longer period of time.  We can work with you to understand how much you will pay and what assets you could potentially lose in a bankruptcy.  Bankruptcy has a long-lasting impact.  You need to fully understand the implications and review all other options before proceeding.

Making minimum payments will allow me to become debt free.

Please look at your credit card statement very closely.  It will show you the number of years it will take for you to be debt free if you continue to make the minimum payments.  These minimum payments will hardly cover your interest costs resulting in a never-ending payment plan.

Non-profit organizations are backed by the government.

These non-profit organizations usually require you to pay back 100% of your debt with interest costs and fees added.  This also has the same impact on your credit rating as other debt restructuring plans that can significantly reduce the amount of debt owed.

All organizations work for the debtors.

This is certainly not the case.  Credit counselors, which advertise themselves as non-profit, are usually funded by the creditors.  Bankruptcy trustees also represent the creditors, and they have an incentive to increase the payment structure as this would be more profitable for themselves.  So in reality, not all organizations work for the debtor.  In fact, it’s the exact opposite.

A 4 Pillars debt relief plan will do permanent harm to my credit rating.

The reality is that your credit rating and credit score can be rebuilt, whereas, money spent servicing your debt is gone forever!

Ironically, people who struggle with debt often expend considerable effort in trying to pay their bills regularly and on time.  The result is someone who is deep in debt, but has a “top notch” credit rating.  Those struggling with debt often fall under the impression that despite their debts, a strong credit rating will somehow help them eliminate their debt.  The sad fact is that those attempting to pay their debts month to month are on a path that often has no end in sight for many years—even decades!

Someone with debt of $40,000 is paying anywhere from $800 – $1200 a month just to service the debt.  When making the minimum payment only, it could take up to 25 years to pay off the debt.  This results in about $200,000 in total payments to cover the original $40,000 debt.  All this money put towards paying off large debts is money that can never be recovered.  There is no benefit in having an excellent credit rating while your bank account continues to be decimated year after year.  Normally, people in this situation will have attempted to qualify for a debt consolidation loan with their bank.  This usually results in the loan being declined as the debt service ratio is too high.  The 4 Pillars program helps to stop the financial bleeding, which will help you pay off your debt much quicker, while allowing you to save a significant amount of money.  Under the above example where a person has $40,000 in debt, nearly 75% of our clients pay approximately $15,000 and at 0% interest.  Compare that with $200,000 that a debtor would have to pay struggling year after year making minimum payments.  Credit can be rebuilt.

4 Pillars consultants are experts at helping individuals restructure their debt while also helping to rebuild credit.  Best of all, someone who has gone through our program will instantly have additional cash flow which can be used to cover other living expenses.  Soon, you will be able to start saving for a new home, contribute to an RRSP, and start building wealth for a brighter future.

Debt and Credit related FAQ’s

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Can credit be rebuilt?

Absolutely Yes! We are experts at helping individuals repair their credit rating.  Our unique credit rebuilding program is structured to get you back on track as soon as possible.  In addition, our partnership with Transunion (one of Canada’s credit reporting agencies) helps our clients monitor their credit score and stay on track.

How can I get the collection agencies off my back?

The 4 Pillars debt relief program will get the collection agencies off your back.  The process we follow can provide legal protection from the collection agencies and puts an end to the collection calls.

What are my rights as far as collection agencies are concerned?

You have many rights as far as dealing with collection agencies.  Collection agencies can not contact you at your workplace provided you have given an alternate phone number.  They can not discuss your debts with someone else and they can not make repeated calls as long as you have informed them of your action plan.  We explain in full detail all the rights that are available to deal with various collection agencies.  Ultimately, the best way to deal with collection agencies is to create a long term, sustainable plan to reduce and eventually eliminate your debt.

How long does debt remain on the credit bureau?

The debt remains on the credit bureau for 6 years from the date of the last activity.  “Activity” is defined as the date the creditor tried to collect the debt.  This is not necessarily the same date as when the debt payment was actually made.  As a result, this gives the creditors the ability to reactivate the date of last activity.  In Canada, the credit system is heavily loaded in favour of the creditors and hence it is better to get professional help to improve your credit score and rating.

Can the errors on my credit bureau be corrected?

Yes, the errors can be corrected.  Please contact us and we will give you a step by step approach to correct the errors and to rebuild your credit.

Can I get a new vehicle while undergoing a debt elimination plan?

Absolutely.  In fact, you can get into a new vehicle immediately after your debt restructuring plan is accepted by the creditors.

What is the difference between Credit Counselors and 4 Pillars?

Credit Counsellor programs are funded by Canada’s largest financial institutions.  Which means, they are working for the benefit of the creditors.  Their payment plans are not based on affordability as they seek to recover over 100% of the total debt owing when you factor in interest charges and fees.

The 4 Pillars program is based upon affordability and we follow a legal process filed through the court system.  This will stop the creditors from taking any action against you.  Best of all, the vast majority of our clients pay back 20-25% of their debts in an affordable monthly payment plan at 0% interest.  Moreover, we also help rebuild your credit while you are in this program.  Our plan is totally structured to benefit our clients, the debtors.

Can I get a loan to pay off my debts?

Yes, you can.  We also have a unique program which helps our clients get a loan to pay off their debts.  Obviously, we will have to look at your current situation to see if this would be an option.

How can I rebuild my credit faster?

Our program is tailored to maximize the credit rebuilding process and increase your score in the most effective manner.

Banks and collection agencies say that they will garnish my wages. Can they do that?

Banks and collection agencies can garnish wages provided that they follow the legal process to obtain a judgement.  It is always recommended you deal with your debt before it gets to this point.

Do I need to cash in my RRSP’s to pay off my debt?

No.  RRSP’s are exempt in Alberta under the bankruptcy and insolvency act.  Therefore, RRSP’s and LIRA’s can be protected.

What information is required to get started with your program?

The information required varies based on your unique situation. It would be best for you to use your free consultation to sit down with us so that we can guide you on the various supporting documents required.  We look at all aspects of your financial situation including income, expenses, assets, and liabilities.

Can personal taxes be included?

Yes, they can be included.  CRA looks at individual intention and compliance when reviewing a proposal, so that is what we guide you on.

How many times can a proposal be filed?

As long as you complete all the requirements under the 1st proposal you can file a 2nd proposal if you have incurred further debt.  We are not in the business of repeat customers and our plan aims to educate you on how to handle debt in the future.

Will I ever be liable for the debt that wasn’t repaid under a proposal?

No, the proposal becomes a new contract with you and the creditors.  If it is structured correctly you will not be required to pay off the remaining debt.

Program questions

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What is your debt relief program?

Our debt relief program is based on finding a plan that is affordable for you.  Our goal is to see our clients pay off their debt and increase cash flow to meet their long term financial goals.  Most of our clients save between 75% to 85% from the amount of their current debt.  The payment plan is also at 0% interest.

What is 4 Pillars background and experience in debt relief?

4 Pillars has been in business for over 12 years in Edmonton and is also licensed and bonded with the government of Alberta.  We have offices located across Canada.  This allows us to track all creditors on a national basis.  We closely monitor all proposals we file as we track creditor acceptance under each circumstance.  We are the pioneers in effective credit rebuilding supported by our partnership with Transunion.

What is the advantage in working with 4 Pillars to get out of debt?

4 Pillars is mandated to work on behalf of the debtors.  We do not get paid by the creditors and our goal is to structure a payment plan as low as possible.  The debt restructuring piece is only a small part of the 4 Pillars program.  The key part of our program is to implement a comprehensive credit rebuilding plan.  This credit rebuilding focus is what sets us apart from our competitors.  Our goal is to get you back into main stream banking and lending products in the shortest time possible.  We provide unique products exclusive to our program that accelerates your return to financial stability.

Will debt reduction affect my credit?

Any time you do not pay the creditors as per the original terms of the lending conditions there will be an impact on your credit rating.  Credit can be rebuilt.  We will help analyze if the temporary effect on your credit is worth the savings that allows you to meet your financial goals at a much faster pace.

I do not have assets. Can I still qualify for the debt relief program?

Yes!

Under provincial legislation, certain assets are exempt.  We will help you understand which assets are protected and structure the proposal so that you retain the assets and deal with your debt.

Can I do this on my own?

Yes, you can.  Our expertise lies with fully understanding the legislation and how to structure a proposal to maximize the benefits to you.  Remember, by doing this on your own, you will be dealing with industry experts by either dealing directly with the creditors or the bankruptcy trustee.  There are 1000’s of trustees across Canada and every trustee views aspects of the bankruptcy and insolvency act differently.  It’s difficult for most people to determine which trustees would be more effective for their specific situation.  We have access to 100’s of trustees and we will find the right trustee for your individual needs.  Think of it like a mortgage broker.  With access to 100’s of lenders to find you the best possible mortgage rate vs a bank employee with access only to that banks products.

Why do you charge fees, while credit counselors don’t charge fees?

The mandate of any credit counselling program is to collect 100% of the debt plus interest plus administrative fees.  We do not get paid by the creditors as we truly represent the debtors.  Our role is to see how our clients, the debtors, can be legally protected, while also paying back an amount that is affordable.  97% of our clients entering a debt restructuring plan successfully complete the program.  We believe our success rate is among the highest in the industry and this is due to the long term commitment we place in our clients.

What are your fees and how are they paid?

There will be absolute full disclosure of our fees when we meet with you.  In fact, the process would not start without you knowing the fees and fully understanding what services you are receiving for the fees paid.  We are licensed and audited by the government of Alberta, so we can not charge fees which are not mandated by the provincial government.  The fees are based on your situation, the complexity of your file, and the affordability based on your income level.

What is the success rate of your clients in getting out of debt?

Since we started operating in Edmonton over 11 years ago, we have had over 95% success rate of our proposals being approved.

Do banks accept your plan?

Absolutely, yes.

Is your debt relief program legal?

Yes, it is covered by federal insolvency legislation.

I want to reduce my credit cards and not my other unsecured debts. Is that possible?

Yes.  We can discuss the options to do this and structure a plan that works for you.  We will also review the advantages and disadvantages of doing this and how it may restrict some options available to you.

I do not want anybody to know about my situation. Is this confidential?

Yes, we are bound by our privacy policy and all the information you provide remains confidential.  We only share information with your consent to parties critical to the restructuring process (ie the trustee and your creditors).

Collection agencies related questions

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The Collection Agencies are behaving rudely.

Collection agencies are represented by agents who are usually paid a commission based on what they collect.  The agencies are also bound by a code of conduct which is not known by the majority of debtors.  We explain this to our clients so that they are aware of their rights as we look to stop any unnecessary bullying by these collection agencies.

Will somebody knock on my door if I do not pay the money they are demanding?

No, there are laws in Canada which are applicable to all creditors.

Will your process help me to handle the collection agencies?

Collection agencies cease to collect the debt once the legal process is put in place.  So our process will put an end to these credit calls.

Situational questions

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I have a student loan. Can that be reduced?

Legislation states that for a student loan to be considered in a debt relief program, the debtor has to have completed their studies for at least 7 years.

One of my credit card companies called me and said that they will accept 50% of my debt as a settlement. Is that possible and what is the catch?

That is a distinct possibility.  The catch is that the payment usually has to be paid in a lump sum.  Remember that settling with one creditor doesn’t always solve your problems and it does not mean the other creditors will accept the same amount.

I have a failed business and because of that there is too much CRA debt for me to pay. Can that be included in the debt elimination process?

Yes, CRA debt can be included.  We will walk you through the process.  This will take some careful planning to ensure the business is dealt with in the correct manner to ensure there are no future liabilities.

I do not want my spouse to be part of the process. Is that possible?

Yes, we can always do that.

I have a high interest personal loan with a financial company who has secured my furniture as collateral. Can that be included?

Absolutely.  The value of the loan can only be tied to the value of the assets.  We have been dealing with these types of loans for over 12 years and we will create a plan to deal with this.

What type of debts can not be included?

Secured loans like mortgages, Car Loans, HELOC’s, and property taxes can not be included in our plan.  The other types of debt which can not be included are family maintenance, alimony, theft of trust money, or any other fines.

Credit Rebuilding

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Is it easy to rebuild my credit score?

The only way to build a strong credit score is to use the credit you have in a responsible manner.  You can not remove items from your credit report if they are accurate, but you can correct inaccurate entries and begin establishing a positive credit history.  There is no magic bullet and no overnight fix to bad credit.  It requires a proper plan and the commitment to implement it.

I have bad credit. How can I build my credit score?

What many consumers don’t realize is that not all types of credit are the same.  You have to know how to start and how to build on each new credit product.  Its understanding how the credit system works, having access to the right products at the right time, and making sure you stick to a few basic rules that builds a strong credit score.

Why is credit rebuilding so important?

Everybody needs to build their own credit score.  Students, men, women, and seniors.  It is one of those things you never realize how important it is until you need it.  Remember, once you have built up a strong score you will have access to the best rates and you will not be reliant on short term, high interest rate loans that can be financially crippling.

Can I obtain good credit if I have bad credit right now?

A good credit score has nothing to do with the house you live in, the car you drive, or how much money you make.  It is about following a few simple credit rebuilding rules and the rest is pretty straight forward.  Anyone can have amazing credit and having good credit is the key to creating wealth.

Is age a barrier to rebuilding credit?

You must be 19 years or older to start building your credit rating.  You must be careful as you need to understand how to manage the credit you obtain.  The risk is that a good credit score will lead you to potentially acquire more credit than you actually need.