Bankruptcy Alternatives in Manitoba
Filing for bankruptcy is something that over 125,000 Canadians will do this year alone, but the vast majority could save themselves a log of hassle by analyzing their options before committing to any debt relief strategy. If you currently face debts that you cannot repay, understanding the bankruptcy alternatives in Manitoba should be at the top of your agenda. With BankruptcyCanada by your side, finding the best solution could not be simpler.
Bankruptcy in Manitoba: Why it’s the Last Resort
Do you know someone that has successfully regained financial stability after filing for bankruptcy and following it up in a responsible manner? If so, they’ve probably told you all about the way it lifted a weight from their shoulders and had a positive impact in the long run.
Unfortunately, they might not have told you about the potential drawbacks, particularly those that did not impact their situation but could hinder yours. Before you consider bankruptcy, you should know the following:
- Filing for bankruptcy in Canada costs $1,800 due to the forms, meetings, hearings, and procedures.
- It takes nine months and one day to become discharged and seven years for the bankruptcy to leave your credit report.
- Bankruptcy only covers unsecured debts. If you have student debts (unless you graduated over seven years ago), secured debts, or child support payments, bankruptcy won’t excuse you from them.
- Even after making a bankruptcy claim, the Office of the Superintendent of Bankruptcy can reject it.
In short: bankruptcy costs money, can bring limited debt relief, and significantly restricts your financial opportunities for at least seven years. While it is the only viable solution in some situations, those that can seek bankruptcy alternatives in Manitoba and the surrounding areas should look to do this.
Which Bankruptcy Alternative in Manitoba is Best for You?
Debt relief can take many forms. The objective of any debtor, then, is to find one that delivers a significant reduction in your repayment obligations while causing the least damage to your long-term credit rating. The best bankruptcy alternatives in Manitoba are as follows:
A consumer proposal is a debt relief strategy that sees a licensed insolvency trustee negotiate new repayment plans with your creditors. They aim to secure a significant reduction on both the principal agreement and the interest rates while they also remain on your credit report for just two years rather than seven.
Before submitting a proposal on your behalf, the trustee will look to analyze your debts and current earnings to determine whether it is the right path and how much you can afford to pay. They will then enter negotiations with all creditors on your behalf. Creditors have 45 days to accept or reject the new terms, but once 50% of the debt is covered by the new repayment strategy, it will force all other creditors to accept it too.
It is not uncommon for reputable trustees to negotiate savings of up to 70% on the total debt while it also turns multiple repayment plans into a single monthly obligation facilitated by the trustee.
- For creditors, accepting a consumer proposal means less hassle and removes the threat of bad debt caused by a debtor’s potential bankruptcy.
- For debtors (you), it allows you to take charge of your debts with a partial repayment while avoiding bankruptcy and the long-term problems that follow.
Contrary to what you might think, debt consolidation does not require you to take out another loan. Instead, debt consolidation courtesy of a trustee organizes your unsecured debts into one account while securing significant reductions on your interest payments. In fact, many claimants find that creditors will waiver the interest completely if it means they receive the principal sum in full.
Debt consolidation comes courtesy of a Debt Management Program (DMP) and can reduce your monthly payments as well as the duration of the payment plan. Trustees negotiate with each creditor on an individual basis, so you will gain a saving even if some reject the plan. When several creditors agree to a deal, it can cut the repayment obligations in half. In turn, you can satisfy the monthly payment without falling further and further into debt.
Creditors do not lose out as the principal agreements are met without the threat of bad debt. Meanwhile, avoiding the need to use debt collection agencies is an attractive feature from their perspective. The immediate financial rewards, along with the sustained benefits gained from avoiding bankruptcy makes debt consolidation plans a great alternative.
- Debt consolidation saves you time and money while organizes your funds and causing less credit damage.
- Even when some creditors won’t budge, debt consolidation strategies can lift a weight off of your shoulders.
Debt settlement is usually completed by a designated debt settlement company. Their focus is to negotiate a deal in which creditors will waiver the ongoing repayments in return for a one-off payment. If you were about to pay $1,800 for a bankruptcy anyway, finding some extra money in return for avoiding the bankruptcy status is an attractive alternative.
The biggest issue revolves around saving money. If you are already losing money each month, securing the funds to make a suitable debt settlement proposal isn’t easy. In the meantime, you may face calls and letters from debt recovery agencies.
Debt settlement can draw a line under the situation almost immediately after the new agreement is accepted. Even if it takes a year to save the funds needed to make it happen, this can be a better solution than bankruptcy.
- Debt settlement looks to gain a quick response once you are ready, but preparing for this process can be stressful.
- It also teaches saving techniques that can benefit you in the long run.
Debt Relief in Manitoba
By now, it should be clear that bankruptcy is not the only option. The bankruptcy alternatives in Manitoba offer the opportunity to save money and achieve peace of mind. However, there’s no ‘one size fits all’ solution, which is why a host of factors ranging from the type and value of the debt to your earnings must be taken into account.
Furthermore, you will need an experienced financial expert in your corner throughout the negotiation periods. BankruptcyCanada has helped over 200,000 Canadians overcome their financial problems, and can help you with debt relief services too. To find out more or book a no-obligation consultation today, get in touch on (877) 879-4770.