Bankruptcy Alternatives in New Brunswick
As millions of Canadians continue to struggle with rising debts, many residents of New Brunswick are considering formal debt resolution options. Although fewer people are filing for bankruptcy in New Brunswick, there has been a noticeable increase in the number of people using alternative debt solutions. Clearly, this indicates a need for bankruptcy alternatives in New Brunswick.
Although bankruptcy can often be a sensible solution to financial problems, many people are determined to avoid filing for this form of insolvency. The potential of losing your assets, along with the perceived stigma of being declared bankrupt, is one of the primary reasons people are reluctant to take this route. Fortunately, there are other options available.
To make an informed decision regarding your financial future, it’s important to have all the facts at your disposal. If you want to learn more about the debt solutions that you could use, take a look at these popular bankruptcy alternatives in New Brunswick:
1. Resetting Your Finances
If you’ve only recently started experiencing financial issues, there may still be time for you to resolve the situation without third-party assistance. Perhaps you have assets you can realize in order to free up some capital? Maybe you want to release some of the equity in your property so that you can access additional funds? Alternatively, examining your budget may bring a range of solutions to light. By reducing your expenditure and prioritizing rising debts, you could successfully overcome temporary financial issues without entering into formal debt resolutions.
2. Credit Counselling
Credit counselling gives you the opportunity to learn more about how the debt industry works and how you can navigate it successfully. If you’re unsure how to proceed or you’re struggling to understand how different debt solutions are implemented, credit counselling can be extremely useful.
Although credit counselling is focused on providing you with knowledge and information, it will give you the confidence to tackle your debt problems too. You’ll work with a trained credit counsellor who will ensure you have all the information you need regarding potential solutions. From here, you can decide which options to pursue and learn more about how to go about it.
3. Informal Debt Settlement
Approaching your creditors directly could be a fast way to stop your debts spiralling. If your financial situation changes, you may be unable to continue making pre-agreed repayments. In most instances, creditors do have procedures in place to assist customers who find themselves facing financial uncertainty. You may be eligible to take a temporary payment break, for example, or creditors may be willing to offer you a lower interest rate.
When you discuss your options with your creditors, be sure to ask if they would consider accepting a one-off payment as a full and final settlement of the debt. If so, you could pay the debt off at a reduced rate and end your liability. Although you’ll need to be able to access the funds required to pay off the reduced sum, this can be an efficient way to become debt-free.
4. Consolidate Your Debts
If you owe money to numerous creditors, it can be hard to keep track of your finances. Some forms of unsecured credit, such as credit cards, will demand varying minimum payments each month, so it’s tricky to budget accordingly.
When you consolidate your debts, you essentially take out a new loan that’s large enough to pay off your existing debts. Although you will still be liable to pay back the debt consolidation loan, you will only be paying one creditor per month, rather than multiple lenders. Furthermore, a debt consolidation loan typically comes with a fixed or variable interest rate. If you choose a fixed rate, you’ll know exactly how much you’ll be paying every month, which makes it easier to budget. Although a variable rate could mean that your repayments change slightly, these potential variations are usually far less volatile than other forms of credit.
Taking out a debt consolidation loan doesn’t mean you’ll be reducing the amount you owe. In fact, the outstanding debts you have will remain exactly the same. However, taking out a consolidation loan that has a lower interest rate than your current individual debts does mean that you should pay less overall.
5. Consumer Proposal
Governed by the Bankruptcy and Insolvency Act, consumer proposals are a form of insolvency. In the same way that licensed insolvency trustees (LITs) manage bankruptcy proceedings, you’ll need a LIT to assist you if you choose to file a consumer proposal. Despite this, consumer proposals can be an effective form of debt resolution, particularly, if you’re wary about negotiating your own agreements with creditors.
Suitable for individuals with $250,000 total debt or less (excluding a mortgage on your home), a consumer proposal can drastically reduce the amount you owe. Some people have managed to reduce their outstanding debt by approximately 70% by filing a consumer proposal, so it can have a significant impact on the amount you need to pay back.
In addition to this, filing a consumer proposal prevents interest from being added, stops wage garnishments and allows you to retain all of your assets. Although a consumer proposal can last for a maximum of five years, the potential to drastically cut your liabilities and free up your monthly income means they are an increasingly popular form of debt resolution.
Find Bankruptcy Alternatives in New Brunswick Now
Dealing with debt problems can be extremely stressful but you aren’t alone. In fact, millions of Canadians are in the same position as you. Although opening up about your financial issues can seem daunting, seeking guidance and assistance can give you great peace of mind.
At Bankruptcy Canada, we routinely help people overcome financial problems and work towards living a debt-free lifestyle. If you want to learn more about implementing debt solutions or you’re eager to find out more about bankruptcy alternatives in New Brunswick, contact us now on (877) 879-4770.