Bankruptcy Alternatives in North York
Bankruptcy may be one of the most obvious ways to clear your debt, but it isn’t the only option.
There are a number of bankruptcy alternatives in North York that can help people with varying degrees of debt to pay their creditors and to begin a new life as debt-free.
Reasons why you may want to look at bankruptcy alternatives
Bankruptcy is a very effective way for people who are insolvent to clear their debts, but just because it is effective does not mean that it is a suitable option for everyone.
Here are some reasons why you may want to explore alternatives to bankruptcy.
You could lose assets
During the bankruptcy process, your eligible assets are used to help pay back your creditors, which means that you could face losing things such as your house or your car.
If you have a lot of assets, then a consumer proposal may be a better way to pay your debts.
Bankruptcy is bad for your credit score
Although your credit score shouldn’t be the only reason for choosing an alternative to bankruptcy, it is an important factor.
When you file for bankruptcy a note will be placed on your credit score which will last for between 6-7 years.
Not all debts are cleared by bankruptcy
Contrary to popular belief, not all debts can be cleared during bankruptcy, including secured debts such as your mortgage or a car loan, alimony payments, child support payments and student loans.
Bankruptcy alternatives in North York
Because bankruptcy can cause people to lose their assets, it is generally seen as a last resort and is reserved for those who are insolvent with no way to pay their debts.
The good news is that there are a number of alternatives to bankruptcy that can help you to get out of debt without risking the loss of personal possessions.
Credit counselling as an alternative to bankruptcy
Credit counselling is an important debt-relief service that can help people regardless of the size of their debt.
Credit counsellors are experts in financial planning and can help people to better organize their money, to budget more effectively and to put debt-payment plans in place with their creditors.
The service can be used alone as a debt-relief option or in conjunction with other debt-relief measures such as debt consolidation, consumer proposal and even bankruptcy.
Debtors work with their credit counsellors to gain an understanding of their financial status, to learn tactics to get them out of debt and to put measures in place to help them secure a debt-free future.
Debt consolidation as an alternative to bankruptcy
Debt consolidation is one of the debt-relief services and alternatives to bankruptcy in North York, that your credit counsellor may discuss with you.
Debt consolidation is a great way for people to turn multiple debts into one, much easier to manage, monthly payment.
There are a number of different debt consolidation options available, including debt consolidation loans and debt repayment plans.
Typically, creditors are willing to assist people who are trying to consolidate their debt, by waving their interest fees potentially saving the person thousands of dollars over the course of their repayments.
Consumer Proposal as an alternative to bankruptcy
Another debt-relief option that is a great alternative to bankruptcy is a Consumer Proposal, which is designed to help you to repay a portion of your debt over a fixed period of time.
Consumer Proposals must be filed by a Licensed Trustee, who will assess your income and your debts to come up with a payment proposal to put forward to your creditors.
As soon as you file for a Consumer Proposal, your creditors will no longer be able to harass you with payment demands, and, if they accept your proposal, will not be able to charge you any more interest on your total debt amount.
After your payment period has passed, which can be no longer than five years, so long as you have paid your payments on time and have completed all of your obligations, then any remaining debts will be discharged.
Which bankruptcy alternative is right for you?
Knowing which debt relief option is right for you can be difficult because every person’s debt situation is slightly different.
The best way to ensure that you tackle your debts in the most efficient way possible is to speak with someone who deals with debt every day – a Licensed Trustee.
Licensed Trustees are trained in all aspects of debt relief and are best placed to help you understand the debt relief options available to you and which are most applicable to your situation.
Here at Bankruptcy Canada, we can help to connect you with more than 430 Licensed Trustees from across Canada, including Trustees in North York.
All of our Trustees offer a no-cost and no-obligation meeting to help you understand what to do next.
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.