Bankruptcy Alternatives In Edmonton
If you’re currently overwhelmed with your debts, you might assume filing for bankruptcy is the next best step. However, while it can be the right answer for some, it isn’t the only debt solution available to you. There are bankruptcy alternatives in Edmonton that could be better suited to you, so read the rest of this article, and get in touch with our team at Bankruptcy Canada to learn more.
What Bankruptcy Won’t Do For You
Bankruptcy is one debt solution but it isn’t for everybody. For starters, you will negatively affect your credit rating if you declare bankruptcy, so this is one reason why you might want to consider some of the alternatives. Secondly, bankruptcy isn’t a way out of every debt.
Debts that are excluded from bankruptcy include:
- Student loans that are less than 7 years old.
- Car loans, mortgages, and other secured debts.
- Alimony and child support payments that haven’t been kept up to date.
There is also the risk that you might lose some of your assets when filing for bankruptcy, as these might be used to offset some of what you owe to your creditors.
For these reasons, you should consider the various bankruptcy alternatives in Edmonton that are available to you before settling on bankruptcy as your way out of your debt situation.
Bankruptcy Alternatives In Edmonton
There are a number of options that could be made available to you, and these include the following.
A Debt Consolidation Loan
With a debt consolidation loan, you reorganize all of your debts into one easier to pay and manage monthly loan. Consequently, you will have less interest to pay, fewer creditors to worry about, and the opportunity to manage your finances better. You will also improve your credit rating, as the debt consolidation loan effectively pays off all of the other debts that you owe.
While this is an excellent bankruptcy alternative in Edmonton, you do need to know that your application for the loan might get turned down if your credit rating is very low. You might also decide against it if you don’t think you can keep up with the monthly payments. However, if you can make the repayments, this is one way to clear your debts sooner.
A Debt Management Plan
You can arrange a debt management plan with your creditors yourself, although you might still choose to work with a credit counselling agency if you decided you needed professional support. A debt management plan is a way to limit the damage your debt does to your financial life, as you should be able to agree on a repayment plan with your creditor that is more attuned to your budget. The interest may be frozen on the loan too, and fees may be waived, so there will be less for you to worry about.
A Consumer Proposal
This is Canada’s number 1 alternative to bankruptcy, as it gives you the option to gain freedom from your debts without having to pay them back in their entirety, and you won’t have to lose your assets through bankruptcy. A Licensed Insolvency Trustee will work out a repayment plan with you if you decide on this option and will liaise with your creditors on your behalf. All of your debts will be covered by the consumer proposal, and as it can’t last for more than 5 years, you will have the peace of mind in knowing that your debt-free life is in sight.
A consumer proposal is a legally binding agreement between you and your creditors, so you will need to stick to your repayment plan. If you didn’t, the agreement might cease, and should this happen, you would be faced with the prospect of paying off your loan in its entirety again. However, a Trustee will work with you on a repayment plan that is in line with what you can realistically afford, so you shouldn’t have to face the possibility of missed payments.
These are just some of the bankruptcy alternatives in Edmonton, but to learn more about the options available to you, get in touch with us. Call us at (877) 879-4770 to arrange a free consultation or use our form to get in touch with a Trustee in your area. If bankruptcy is the right answer for you, then so be it. We will support you through the process. But if there are alternatives, we will explain these to you to make sure you’re fully informed about the debt relief options open to you.