Personal Debt Solutions Canada - Alternatives to Bankruptcy in Canada
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Alternatives to Bankruptcy in Canada
Bankruptcy is not the only solution to your problems.
Sometimes bankruptcy is the solution when there is nothing left over after you have paid your basic living expenses, let alone trying to pay down your debts. In the case were your monthly personal financial costs are significant or if your income is modest, bankruptcy is the only solution.
But in some cases, debtors do have some funds available each month after their basic family needs have been met, but not enough to pay down their debt in a reasonable period of time given the level of debt and the rate of interest. So what are the alternatives?
I have some money each month to put towards my debts, but want to avoid bankruptcy, what should I do?
Are there other solutions to my debt issues other than filing for personal bankruptcy?
Yes, Canada has several bankruptcy alternatives that must be explored before filing personal bankruptcy. Some of the possibilities that may be available to you are:
Keep on, keeping on. Doing what you did before.
Each month you should at least try to make your minimum payments to your debts. But it is important to realize that the "minimum payment" requirements and do not necessarily mean that you will ever be able to pay your debts in full in your lifetime. Now, under Canadian law, the calculated time that it will take you to pay off your debt in full, if you only make the minimum payments, must be disclosed on your statement. If you only pay the minimum each month, it may take years and years to get out of debt.
Negotiate with your creditors for, lower monthly payments, reduced interest rate, or lump sum partial payment in exchange for writing off the balance of the debt.Pros Cons
Debt consolidation loanPros Cons
Debt management plan and credit counselling.Pros Cons
A Consumer Proposal is an offer to your creditors to pay a portion of your debts back, without interest, based on your personal ability to make payments. It is a formalized process under the Bankruptcy and Insolvency Act and therefore the only alternative to a bankruptcy that is federally regulated.Pros Cons
This may be the best alternative for you given your income and the level of debt that you have.
Our Canadian federally licensed trustees can sit down with you to discuss your personal situation to determine which debt repayment alternative is the right one for you.
Our members are in your community and we offer a free consultation. Contact us today and discover how quickly your financial stress just disappears!