As the New Year approaches, we invariably have many clients attend meetings in our office where they “confess” to having taken on significant credit card debt over the past year. It seems as if the annual ritual of Xmas shopping pushes them over the edge and they resolve to clear up the debts once and for all.

As discussed in earlier posts, perhaps as many as 60% of all Canadians are carrying some measure of unsecured credit debts. With the new laws on credit card companies forcing them to clealy disclose and advise their clients how long it will take to pay off the balance, (assuming minimum payments) many people are in shock at what they are seeing.

So it is no surprise and no shame if you fall into this group of people – you are in good company.

According to a recent study, the amount of equity takeout in the past year is unchanged from last year with around one in five homeowners, or 18 per cent, taking equity out of their home at an average of $46,000.

And of these, a full 45% are using the money to repay debts or consolidate their debts. It sure makes sense if you can replace credit card debt (which could well be at a 19% interest rate or more) and replace it with a single mortgage debt at a rate of around 3%.

Related Articles

• Using Home Equity Loan & Mortgage Refinancing to Pay Off Your Consumer Proposal Early
• Using Home Equity Loan to Pay Off CRA Tax Debt in Canada
• Keeping Credit Cards with a Consumer Proposal