Bankruptcy Alternatives in Nanaimo
Do you really need to claim bankruptcy?
Financial difficulties usually lead to debt, especially if you haven’t paid much attention to budgeting. Claiming bankruptcy is usually the first solution that people choose to eliminate debt, especially since claiming bankruptcy in Nanaimo, BC can leave you with most of your possessions, giving you an easier time to recover from your situation.
Unfortunately, claiming bankruptcy can lead to a number of other problems such as staining your credit report. This can make it difficult for you to seek financial assistance in the future for things such as a mortgage or car loan. As such, it’s a good idea to see if bankruptcy is right for your situation.
For example, there are three types of debt that bankruptcy can’t erase:
- Secured debts, such as a mortgage or car loan.
- Student loans that are less than 7 years old.
- Child and alimony support payments that are not up to date.
Creditors can also delay your bankruptcy claim if you’ve built up a large credit card debt, and you may need to pay this off before you can claim bankruptcy.
The bankruptcy process isn’t as simple as you think
In addition, claiming bankruptcy is far from simple. It’s more than just filling in a form and handing it to a trustee. The process can actually take a minimum of 9 months in some cases, and there are lots of fees and costs associated with claiming bankruptcy in Nanaimo, BC. You’ll also need to attend counselling sessions to learn more about budgeting and managing your credit in the future.
Bankruptcy claims can also be postponed by trustees, the court, creditors, or even the Office of the Superintendent of Bankruptcy. You might also need to answer questions under oath or attend hearings as part of the process to prove that claiming bankruptcy is suitable for your situation.
So what are the alternatives to bankruptcy in Nanaimo?
Thankfully, there are other alternatives to bankruptcy in Nanaimo.
- Debt consolidation allows you to consolidate all of your debts into a single monthly repayment plan. This effectively erases any interest you’ve built up and allows you to pay back a single lender with a lower interest rate.
- Debt settlement involves negotiating with your creditor to reach a settlement plan. This usually involves paying back a portion of your debts and then considering it paid in full. While it sounds like a bad deal for the lender, this is surprisingly common.
- A consumer proposal is another popular option that could reduce your debts by up to 80%. The remainder is then paid off interest-free over a course of five years or less depending on your circumstances.
The ideal option for your situation will depend on your financial circumstances. If you’d like to learn more about bankruptcy alternatives in Nanaimo, BC, don’t hesitate to contact us today for more information.