Many people are struggling with paying their bills and are considering bankruptcy and you do not have to feel guilty about bankruptcy as most bankrupts are honest, hard working people who fell into debt through no fault of their own.
When considering how you can avoid bankruptcy you need to consider certain factors such as:
How bad is your debt? If you think you can get your debt under control by making budgeting and lifestyle changes then you can probably avoid bankruptcy without professional assistance.
How is your credit history? If you are struggling with debt and are considering bankruptcy but would like to avoid bankruptcy you might be able to get your debt under control with a consolidation loan that allows you to refinance if your credit is good.
What assets do you have? If you don’t have any assets then there might be more benefits to filing bankruptcy than seeking a way to avoid bankruptcy, although if you have significant assets and significant debt you should probably consider a consumer proposal.
What is My Best Option for Avoiding Bankruptcy?
If you cannot get out of debt on your own and need professional assistance from a bankruptcy trustee but would like to avoid bankruptcy your #1 choice for how to avoid bankruptcy is to make a consumer proposal with your creditors.
A consumer proposal is a legal proceeding administered under the BIA (Bankruptcy and Insolvency Act) by a consumer proposal administrator (only a government licensed insolvency trustee can act as a proposal administrator).
When making a consumer proposal you will meet with your selected bankruptcy trustee / proposal administrator who will make an estimation on what percentage of debt you can repay over a period of time lasting for a maximum of 5 years based on your budget and what is fair to your creditors.
Although your creditors can reject your proposal they are usually accepted because creditors would rather accept part of their money coming back than possibly much less than if you go bankrupt (One of the main rules of a consumer proposal is that your creditors must be in a better position if you make a proposal than if you go bankrupt).
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