Bankruptcy Alternatives in Penticton
Bankruptcy can be the first thing that comes to mind when dealing with debt. In some circumstances, bankruptcy could be your only solution, but for many people, there are alternatives available. Bankruptcy stays with you for years after you’re discharged, which might not be the best plan for you in the short-term.
Whether you’re considering bankruptcy or another form of debt management, it’s important to understand your options. Find out more about bankruptcy alternatives in Penticton.
Does your debt qualify for bankruptcy?
Bankruptcy can help you tackle many debts, giving you a fresh start financially. But it comes at a price. While your bankruptcy order can contain loans, credit cards and similar unsecured debts, there are some things your bankruptcy won’t cover, including:
- Secured debts (such as a car loan or mortgage).
- Student loans (if they are less than 7 years old).
- Child support and alimony payments.
Establishing which debts are covered by bankruptcy is important. By meeting with a Licensed Insolvency Trustee, you can get the advice you need to help you take the best approach to your debts.
How bankruptcy works
Filing for bankruptcy isn’t a fast process. It can take up to 9 months to complete the bankruptcy process. A successful, prompt discharge will depend on you fulfilling certain duties outlined by a Licensed Insolvency Trustee, including:
- Making payments via your Licensed Insolvency Trustee to cover the fees associated with your bankruptcy.
- Attending two credit counselling sessions.
- Stick to any other terms outlined by your Trustee.
Most first-time bankruptcies are completed after 9 months, but this can be extended in cases where you need to make additional payments to your creditors, or you don’t fulfil your duties. Your Trustee will work with you throughout the process, helping to assess your assets and make appropriate payments to creditors.
After completing all of your duties as agreed, you will then be discharged from your bankruptcy.
The effect of bankruptcy on your credit rating
But bankruptcy doesn’t end once you’re discharged. One of the consequences of bankruptcy is that it will stay on your credit file for 6 years after you complete your duties. This can make things very difficult for you financially, as it will make it hard to get credit – so mortgages and car loans could be out of the question.
Bankruptcy is not a decision to be taken lightly, with the consequences staying with you for many years.
Bankruptcy alternatives in Penticton
If the long-term implications of bankruptcy are too much of a risk for you, then it’s worth exploring your other options to resolve your debt issues. In many cases, it could take multiple solutions to help you clear your debts and start over.
A debt consolidation loan could help you reduce the number of payments you need to make, and lower your overall interest too. To make it work, you’ll need to be able to manage the monthly repayments and avoid more debt. If your credit rating is poor because of your current situation, you might find it difficult to get a loan with a low-interest rate.
A debt repayment plan, however, could be a more appropriate option. Working with a credit counselling organization, you could come to an agreement with your creditors to reduce your interest/repayments, making your repayments more affordable to help you clear your debt sooner.
With a debt settlement plan, you could reduce your overall debt, creditors accepting a certain amount to be repaid, as opposed to the entire sum that you owe. There are debt settlement companies that could arrange this on your behalf, but beware of scams that will see you pay money, but not have any of it go towards your debts.
Another way you can deal with significant debt is through a consumer proposal. If you decide to take this course of action, a Licensed Insolvency Trustee will work with your creditors to agree a settlement plan. Like bankruptcy, a consumer proposal will stay on your file for several years, but you’ll be able to retain assets like your house as part of the settlement.
Choosing the right option for you
If you’re considering bankruptcy and want to talk to someone about your options, talk to a Licensed Insolvency Trustee. They will assess your situation and make recommendations, including bankruptcy alternatives in Penticton. This could be your crucial first step towards becoming debt-free.
Explore bankruptcy alternatives in Penticton and find your debt solution today by calling (877) 879-4770.