Bankruptcy is not your only option. Depending on your financial situation other options may be more appropriate. I can help you evaluate these options and identify the solution that is right for you.
Credit counselling
If you have trouble making a budget and sticking to it or if you want to improve your spending habits or financial management skills, credit counselling may be helpful to you. While I can provide these services, I can also refer you to a local non-profit credit counselling organization. Credit counselling can set you on a new path to more responsible finances, but it won’t eliminate your debt problem over night.
Debt consolidation loan
You may be able to consolidate various higher-interest loans into one easier-to-manage and less-costly loan. Talk to your bank or other financial institution to determine if you qualify. However, be careful of what could be just a short-term fix with long-term risks. Unless you address the underlying causes of your financial difficulties, through credit counselling for example, you may end up with even more debt after a few years. Use the cash-flow savings to reduce your existing debt, not to take on more debt or expenses.
Contact your creditors
An often overlooked solution is to contact your creditors directly and discuss the possibility of making an informal arrangement. Explain your situation and be upfront about your personal finances. You may be able to defer making payments for a short period of time or make lower payments over a longer period of time. The success of this option is largely dependent on the severity of your financial situation, the relationship you have with your creditors and the extent to which you’ve fallen behind on your payments.
Legislative options
If your financial problems are more severe, you may be able to obtain protection from collection proceedings under the Bankruptcy and Insolvency Act by making a consumer proposal or filing for bankruptcy. These options require the assistance of a Trustee in Bankruptcy. As a licensed trustee, I am authorized to prepare consumer proposals and bankruptcy filings.
Consumer proposal
A consumer proposal is a formal offer to your creditors to settle your unsecured debts. A consumer proposal allows you to reduce the total amount of money you owe, gives you extra time to pay the remainder and stops further interest. You also get to keep your assets. A consumer proposal immediately stops collection calls, wage garnishments and other debt collection proceedings. Creditors benefit from a consumer proposal because it gives them more than they would get in a bankruptcy.
Bankruptcy
Bankruptcy is the option of last resort if you are unable to satisfy your financial responsibilities by other means. Bankruptcy relieves you of most, if not all, of your debts. It also immediately stops collection calls, wage garnishments and other debt collection proceedings. You will be required to turn over your assets (other than those exempt from seizure by law) to the trustee who will sell them and distribute the proceeds to your creditors.
The best course of action depends on your financial situation. I can help you evaluate these options and identify the solution that is right for you.
