Bankruptcy Alternatives in Burnaby
When dealing with difficult debts, bankruptcy can seem like the ideal solution although bankruptcy alternatives in Burnaby could be better.
While bankruptcy could be the answer for many, it isn’t the only option for people wanting to clear their debts.
As bankruptcy can take 9 months to process, and stay on your credit file for years after you’re discharged, there are long-term consequences you’ll need to consider before you file.
Learn more about bankruptcy alternatives in Burnaby that could provide you with a different solution to becoming debt-free.
Does your debt qualify for bankruptcy?
Bankruptcy can help you clear your debts and start afresh, but it’s not as simple as that.
Only certain debts can be included in your bankruptcy, with exclusions including:
- Secured debts (such as a car loan or mortgage).
- Student loans (if they are less than 7 years old).
- Child support and alimony payments.
To find out if your debts qualify for bankruptcy, you can meet with a Licensed Insolvency Trustee, who will assess your situation and recommend the most appropriate course of action for dealing with your debts.
How bankruptcy works
Filing for bankruptcy takes time.
In fact, It can take 9 months to complete the bankruptcy process.
To be discharged after this period, you’ll need to fulfil certain duties outlined by a Licensed Insolvency Trustee, including:
- Making payments via your Licensed Insolvency Trustee to cover the fees associated with your bankruptcy.
- Attending two credit counselling sessions.
- Complete any other terms outlined by your Trustee.
In most cases, first-time bankruptcy will be completed after 9 months.
However, if you fail in your duties or you need to make additional payments to your creditors, it could take even longer to be discharged.
Your Trustee will work with you throughout the process, taking care of your assets and making sure payments are made.
Once you have completed all of your duties and your Licensed Insolvency Trustee is satisfied, you will then be discharged from your bankruptcy.
The effect of bankruptcy on your credit rating
Bankruptcy will stay on your credit file for 6 years after you complete your duties, meaning it’s not a short-term solution to your problems.
During this period, you will find it difficult to obtain credit, which can put your life on hold if you were hoping to get a mortgage or buy a new car.
You’ll need to spend time rebuilding your credit rating ready for when the bankruptcy is removed from your file.
Bankruptcy alternatives in Burnaby
Bankruptcy is not to be taken lightly, and if you’re worried about the long-term implications, you should explore bankruptcy alternatives in Burnaby.
You might find that the most appropriate solution for you is a combination of several solutions.
If you can manage the repayments and stick to a budget, then a debt consolidation loan could be suitable for you.
It will help you reduce the number of payments you need to make, and lower your overall interest.
Your eligibility will depend on your existing credit score, and if you have a history of bad credit, you could struggle to get a low-interest rate.
A debt repayment plan, however, could be a suitable solution to reducing the amount you repay.
A credit counselling organization can help you come to an agreement with your creditors which could reduce or stop your interest so that you can repay your debts quicker.
Debt settlement plans allow you to reduce your overall debt, with creditors writing off a portion of your debts and agreeing to be repaid a certain amount.
Be warned that some companies claiming to be debt settlement companies are scammers, and you should do your research before proceeding.
Another suitable alternative to bankruptcy is a consumer proposal.
A consumer proposal will stay on your file for several years, but you’ll be able to retain assets like your house as part of the settlement.
You’ll need to work on your credit rating following a consumer proposal and attend debt counselling sessions to help you manage your debts more effectively in the future.
Choosing the right option for you
If you want to understand more about bankruptcy and its alternatives, talk to a Licensed Insolvency Trustee.
With a free consultation, you could find out the best solutions for dealing with your debts and move forward with your Trustee to help you become debt-free.
Explore bankruptcy alternatives in Burnaby and find the right debt solution for you by calling (877) 879-4770.