Bankruptcy Alternatives in Burlington
What happens when you’re in debt? If you don’t take action, the debt grows every single month. Before you know it, you’re thousands of dollars in debt and have no way of paying what you owe. In Canada, if you have $1000 of debts, you qualify for bankruptcy. But, is this always the right decision for you?
Bankruptcy is a legal process by which you can eliminate your debts. However, it’s never recommended that you jump straight into it. Instead, you’re better off searching for bankruptcy alternatives in Burlington to discover a solution that works for you.
Regardless of how much debt you’re in, we can help you find the correct path to go down. This will ensure you’re free from debts and can get back to living a stress-free life.
What Are The Disadvantages Of Bankruptcy?
Why do people file for bankruptcy in Burlington? It’s simple, this is a way of wiping out your debts once and for all. That’s the big selling point of this option: you get rid of debts without having to pay them off.
Having said that, there are some significant disadvantages that you should be aware of. Don’t assume that bankruptcy is an easy way out – far from it! Here are a few concerns you should know:
- Bankruptcy costs money and you will have to make payments to the trustee that filed it for you.
- It takes at least 9 months for the whole bankruptcy process to be completed.
- After this 9 months, you will still have a bankruptcy on your credit report for at least 6 years – this can impact your credit score and make it hard to apply for loans.
- You may be forced to sell assets – like your car or home – depending on how much money you owe and how much equity is in your assets.
- Some debts are excluded from bankruptcy: student loans, secured debts, and child/alimony support payments.
It should be clear that bankruptcy is far from the perfect solution to every debt problem. Realistically, this option is seen as the last resort. It’s the solution you choose when all of the alternatives have either been attempted or won’t work for you.
What Are The Bankruptcy Alternatives in Burlington?
Don’t fall into the trap of assuming bankruptcy is the only way to handle your debts. The first thing to do is to work on improving your budget and saving money. For people with minor debts, this is all it takes to wipe them out.
Of course, those of you with more significant debt issues will need further guidance. So, here are the best bankruptcy alternatives in Burlington:
The first alternative is a simple one: ask your creditors to restructure your debt. This can include the following:
- Lowering or removing interest payments.
- Extending the loan duration to give you more time to make payments, therefore reducing your monthly payments.
- Negotiating a more flexible payment plan suitable for your situation.
Restructuring your debts can make them easier to manage. You’ll be surprised at how many creditors are willing to do this if you ask.
If you have lots of different debts that keep mounting up, debt consolidation works incredibly well. It consolidates your debts into a single loan, which you then payback. The process looks like this:
- Apply for a debt consolidation loan.
- Use the loan to pay all your debts.
- Make monthly repayments to pay off the loan.
The benefit of this is that you can save thousands on interest rates and additional fees. Plus, it’s much simpler to handle one repayment than multiple ones every month at different dates.
If the previous options don’t work, you can attempt a debt settlement. Here, you negotiate with creditors to pay a lump sum that frees you from the debt. This only works if the creditor agrees, but also only when you physically can’t repay your debts. Creditors may accept a settlement if it stops you from filing a consumer proposal or going bankrupt – which both result in them getting less money.
This is a legal process that’s a step down from bankruptcy. With a consumer proposal, you speak to creditors and agree to pay back a percentage of your debts. Instead of paying a lump sum, you make monthly repayments. This only works if your creditors agree to the proposal.
Find The Best Bankruptcy Alternatives in Burlington!
How should you deal with your debts? It all comes down to finding the best solutions and looking to avoid bankruptcy where possible. We can help you figure out the correct course of action by assessing your finances and seeing what debt-relief options are available to you. Call us today to book a consultation or fill in our online evaluation form.