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Bankruptcy Alternatives in Kingston

 

Bankruptcy is a debt-relief option that scares many people, but the good news is, there are a number of alternatives to bankruptcy that can help you to get out of debt.

Bankruptcy isn’t always the answer

Here at Bankruptcy Canada, we may be specialists in bankruptcy but we are the first to admit that bankruptcy isn’t the solution for everyone.  Bankruptcy may be a very effective way for people who are insolvent to clear their debts, but financial freedom through bankruptcy comes with a price.  Here are some reasons why bankruptcy isn’t a debt-relief option for everyone.

  • Assets are used to settle your debts

If you are declared insolvent, then you do not have the means by which to pay your debts, and as such, by declaring bankruptcy your eligible assets will be used to pay your creditors. It’s important to remember that not all assets are used during the bankruptcy process and there are limits in place designed to ensure that those going through bankruptcy are able to keep a reasonable proportion of what they own. 

  • You will damage your credit score

As the most drastic debt-relief measure it’s unsurprising that bankruptcy will remain on your credit score for up to 7 years, making it difficult for you to gain credit for many years even after your bankruptcy has ended.

  • You could still end up having debts to pay

Bankruptcy doesn’t clear every type of debt, including secured debts, such as your mortgage or a car loan, student loans, alimony payments and child support. If you have debts in these areas then you will still need to find a way to pay.

Bankruptcy alternatives in Kingston

As you can see, bankruptcy is a fairly drastic process which is why there are a number of less severe debt relief options available to help you manage your debt. Some of the most common debt relief options include credit counselling, debt consolidation and Consumer Proposal, here’s how they can help you. 

Credit counselling as an alternative to bankruptcy in Kingston

A lot of debt problems stem from a poor relationship with money, which can be healed with effective credit counselling. Credit counsellors are experts in understanding debt and can help debtors to evaluate their current financial situation and to educate them about budgeting, money management and other debt-relief services. Many people in debt find that credit counselling alone is enough to help them form a debt-repayment plan and to climb their way out of debt, but for others, credit counselling can form a healthy part of a wider debt-relief strategy involving other debt relief measures.

Debt consolidation as an alternative to bankruptcy in Kingston

Debt can quickly pile up, growing from a small problem into a much bigger issue over time. High-interest rates make it nearly impossible to become debt-free by simply making the minimum monthly repayments and so it’s no wonder that for most people their debt can quickly spiral out of control. Debt consolidation can be a great way to avoid filing for bankruptcy, helping an individual to get a grip on their debt by consolidating multiple monthly debt repayments into one easy to manage lump sum. There are a number of different ways to consolidate your debts including loans and monthly payment consolidation.

Consumer Proposal as an alternative to bankruptcy

Lastly, for those with debts over $1000 but under $250,000, a Consumer Proposal can help them to preserve their assets while working towards a debt-free life. A Consumer Proposal is a legal agreement between the debtor and their creditors stating a monthly repayment amount that they can afford to pay which will be paid over a set duration of time of up to five years. So long as the debtor fulfils their obligations, then at the end of the agreement, any remaining debts owed to their creditors will be discharged.

Knowing which bankruptcy alternative to choose

Debt comes in many shapes and sizes, which makes it very difficult to stipulate which debt relief option is right for each debtor without assessing their debts, income and situation. To ensure that you choose the most effective and efficient debt-relief alternative to bankruptcy, it is always best to speak with a qualified Licensed Trustee who can offer you confidential and free advice about the variety of services available to you. Here at Bankruptcy Canada, we have a network of more than 430 Licenced Trustees ready and waiting to help you get out of debt.  To be put in touch with one of our Trustees today, simply call us on (877) 879-4770 or fill out one of our online forms