Debt Relief

Whether you are a Senior or under 50 living in Ontario there are times when debt relief is a necessary.  In 2019, The Canadian Government created a Consumer Debt Profile.  When looking at the statistics of this infographic it is interesting to note that you are not alone.  There are a variety of reasons and stages in one’s life that creates the perfect storm to put you in the hole.  Lost of job, illness, bad decisions, are just some of those reasons.

A Creative Solution

When Companies are in financial debt they are able to use leasebacks in order to capitalize on the cash they have already invested in the bricks and mortar building to finance that debt. This is done when they still need the asset itself to operate their business. Sale-leasebacks can be attractive as an alternative methods of raising capital. When a company needs to raise cash, it typically takes out a loan (incurring debt) uses equity financing (issuing stock).

However, a loan must be repaid and shows up on the company’s balance sheet as a debt. A leaseback transaction can actually help improve a company’s balance sheet health: The liability on the balance sheet will go down (by avoiding more debt), and current assets will show an increase (in the form of cash and the lease agreement). 

Although equity does not need to be paid back, shareholders have a claim on a company’s earnings based on their portion of its stock. An example of a company that did this is Canadian Tire. 

In 2013, when Jean approached me to think of a creative solution, to help her I remembered about corporate Sales and Leaseback and thought why can’t we do this in the residential space.

 Which ultimately means that we wouldn’t pile expensive interest on top of interest on top of debt. We don’t refinance all of your debt with a different company.

We don’t do reverse mortgages.  because that is just very expensive interest hidden until you sell the house.  We don’t borrow against the equity of your home. 

What we  do is utilize a Sale and Leaseback solution so that you are in a financially better  position. TIf the  corporate world can used this type of solution to transfer debt off the balance sheet and therefore getting rid of all of their debt by only changing their ownership status from owner to renter.  Then so can you a residential owner.   Image being debt-free without the stress or trauma of moving. This provides you with the luxury of taking a breath and re-evaluating your circumstances.

All of a sudden the equity in the home is now in the bank collecting interest instead of you being charged higher interest because of a lack-lustre credit score. In fact in most cases your credit score isn’t even a factor in the Sale

How do we do this?

We will sell your home to a real estate investor that is interested in buying your home at fair market value and renting back at fair market value.

They win because they know you love where you live so much that you are willing to rent it back.  They know that you will take care of it of their investment.  You win because your bills are paid, you have money in the bank and the money that you make from your house is invested in whatever is your core objective instead of bricks and mortar.

Once your money is in the bank it is time to take stock so this will not happen to you again.

Researching trusted sites and ethical information we discovered this valuable site. It is the Government of Canada financial wellness site.

Canadian Budgeting