How to Get Out of Debt Without Going Bankrupt: 5 Alternatives to Get Out of Debt
It’s no secret that debt can be extremely difficult to overcome. Many people feel overwhelmed by their finances, and the idea of escaping the bills you’ve built up can often feel like a fantasy.
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The option of bankruptcy can look like an easy way out when you’re in this position, though this will have a long-term impact on your finances, and it’s always worth exploring the alternatives before you take such drastic action.
Making A Budget
Making a budget isn’t too complicated, and the team at Bankruptcy Canada can help you with this process.
The aim of this approach will be to simply save and pay back your debt as quickly as you can.
Budgeting is difficult and can be the riskiest route, as many people will struggle to save enough money to cover their debt properly by the time payments are due.
Credit counsellors can help you to reduce the cost of your loans by lowering the interest rates you pay.
They will produce a debt management plan which will give you a simpler way to pay off all of your debt without having to control your own strict budget.
Debt Consolidation Loans
Having a lot of small loans will always cost more than having a larger one.
Not only are smaller loans usually short-term, but their combined interest rates can also work out as more than a larger single loan.
This doesn’t reduce your debt, though many creditors offer specific loans for this purpose, and this makes it easier to tell which options will be the best.
A Consumer Proposal
A consumer proposal is an agreement which is made between a debtor and a creditor.
This will usually give you up to five years to pay back your debt, with any remaining money being wiped away at the end of the agreed period.
Filing a consumer proposal initiates a stay of proceedings, giving you the chance to free yourself from lawsuits and harassing letters from your creditors.
Bankruptcy Canada can help you to draft a consumer proposal to submit to your creditors.
This will involve offering to pay a lump sum or monthly payments which cover part of the overall debt.
Once you’ve paid this portion, you will be released from the money you owe, potentially saving you thousands.
This can be hard to negotiate, and will usually have higher chances of success if your debt is old and your creditors simply want to get rid of it.
How Bankruptcy Canada Can Help With Bankruptcy
Bankruptcy Canada has more than 20 years of experience working with bankruptcy and credit relief, and can offer support with all of the options on this list.
Whether you want to make a budget, look for credit counselling, or file a consumer proposal, our friendly team is here to help you every step of the way.
Choosing to file for bankruptcy is a very serious decision and having an expert to offer support will always pay off.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?