Bankruptcy Alternatives in BC
The fact that you’re considering bankruptcy shows that you are currently in an unenviable financial position. However, declaring yourself bankrupt might not be the only option. In truth, there are plenty of bankruptcy alternatives in BC that could provide a source of light at the end of the proverbial tunnel. BankruptcyCanada can guide you towards the right solution.
Why Choose Bankruptcy Alternatives in BC?
When faced with serious and mounting debts, joining the 125,000 Canadians that file for bankruptcy each year seems an attractive prospect, especially if you have a friend or relative that has built a better financial future on the back of bankruptcy. While the process may have worked for them, there are several issues that you’re probably unaware of, such as:
- Bankruptcy isn’t free. In fact, it costs $1,800 to complete the process, which covers application fees and costs associated with the bankruptcy period.
- Bankruptcy lasts for at least nine months and one day until you are discharged while it stays on your credit report for seven years longer.
- The Office of the Superintendent of Bankruptcy can delay or even reject the bankruptcy declaration while creditors can impact it too.
Perhaps most tellingly, though, bankruptcy doesn’t free you from all financial obligations. All secured debts, student loans (unless they are older than seven years), alimony payments, and child support payments will all have to be paid regardless of the bankruptcy status. Therefore, any individual that won’t see any major benefits will want to consider bankruptcy alternatives in BC.
What Are The Best Bankruptcy Alternatives in British Columbia?
There is no single ‘one size fits all’ solution to escape financial problems. However, when analyzing debt relief options that avoid the drawbacks of bankruptcy, the following three avenues are the most likely answers to your financial problems:
Consumer Proposals in BC
A consumer proposal is a financial tool used by licensed insolvency trustees to help debtors reduce the repayment on both the principal sums and the accumulated interest costs. Like bankruptcy, the benefits are limited to unsecured debts, but their advantages over fling for bankruptcy in BC are plentiful.
Firstly, the trustee will analyze your financial situation to see how much money is owed, whether the monies owed are unsecured debts, and your other outgoing to see what you can afford to pay back each month on your current salary. Once they have this information, trustees devise and submit a proposal to all creditors, who then have 45 days to accept or reject the proposal.
The process may include several rounds of negotiations and can see repayment plans spread out over a period of five years. However, once at least 50% of creditors (weighted by value) have agreed to the new terms, all other creditors must accept the deal too. Following this, a single monthly repayment is made to the trustee, who then distributed it to various creditors until all debts are cleared.
Why Consumer Proposals?
- It is a legally binding contract that creditors cannot go back on.
- The consumer proposal stays on your record for two years, rather than seven.
- Consumer proposals cover all creditors at once, and can save up to 70%.
Debt Consolidation in BC
Debt consolidation courtesy of loans can raise a few problems, not least because lenders may reject the application. However, professional debt consolidation focuses on combining several debts into one repayment plan. It can save you a lot of hassle and, crucially, a lot of money.
The Debt Management Programs focus on lowering your interest rates rather than the principal fees, but can still generate savings that are worth thousands over the course of a repayment plan. Moreover, the trustee will negotiate with individual creditors, which means you will gain a saving even when some creditors reject the notion. Still, you will require a high success rate to significantly change your financial future, which is why an experienced trustee is required.
Debt consolidation negotiations are regularly accepted by creditors as it means they still gain the principal monies owed and remove the fear of bad debt. Meanwhile, debtors escape the threat of bankruptcy and the long-term restrictions it brings.
Why Debt Consolidation?
- It’s not uncommon for the full interest rate to be waived, bringing immediate benefits.
- New repayment plans are structured to meet your budget.
- Debt collectors will have to stop hassling you as soon as the plan is submitted.
Debt settlement in BC
Debt settlement focuses on the idea of paying a one-off fee to creditors in return for them closing your accounts. It is arguably the fastest way to become discharged from your debts. However, the fact that you need to have a good level of capital saved away is an issue for anyone facing financial difficulties.
When saving money for the debt settlement proposal, creditors can continue to contact you. However, if you are able to deal with the stress this brings, saving for a few months could unlock the door to a brighter financial future. Nonetheless, you must juggle this with the credit damage that may occur due to missed payments in the intervening period.
Debt settlement is conducted by specialist debt settlement companies, who will handle negotiations with all creditors on your behalf. In most cases, you will only pay for the service if a settlement is agreed.
Why Debt Settlement?
- Bankruptcy costs $1,800, which is a significant percentage of the one-off fee.
- Once cleared, the financial restrictions are minimal compared to those associated with bankruptcy.
- It gets you into the habit of saving.
Finding The Best Debt Relief Option For You
When taking control of your financial situation, it’s imperative that you choose the debt relief service that is best matched to your needs. Given that no two individuals have identical financial and life situations, you must take the following factors into account:
- The value of your debts.
- The unsecured debt to secured debt ratio.
- Previous bankruptcies and financial issues.
- Your earnings and other outgoings.
Entering the process with an understanding of the various avenues is vital. Nonetheless, the value of an experienced and diligent trustee cannot be emphasized enough. Here at BankruptcyCanada, we boast 21 years of experience alongside a local presence with multiple offices across British Columbia. When supported by our dedication and transparent communication, it’s no wonder that over 200,000 Canadians have entrusted us with their financial futures.
To discover the benefits of bankruptcy alternatives in BC today, call (877) 879-4770 now.