Bankruptcy Alternatives in Prince George
Do you really need to claim bankruptcy?
If you’re suffering financial difficulties, then claiming bankruptcy is likely the first solution on your mind. Bankruptcy in Prince George, BC allows you to keep many of your possessions, allowing you to comfortably rebuild your financial stability without debt weighing you down.
However, bankruptcy leaves a stain on your credit report and makes it difficult for you to seek financial assistance in the future, limiting your options for things such as a mortgage, personal loan or car loan. So before you claim bankruptcy, it’s a good idea to see if bankruptcy is even a good idea for your situation.
There are three common forms of debt that cannot be erased through bankruptcy:
- 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 may also stop you from claiming bankruptcy if you’ve accumulated a large credit card bill. You’ll need to pay off some of this before you can eliminate the debt through bankruptcy.
The bankruptcy process isn’t as simple as you think
Claiming bankruptcy isn’t as simple as just filling in a form and handing it to a trustee. In fact, the process can often take a minimum of 9 months and there are costs and fees associated with the process. You’ll also need to attend counselling sessions to help prevent you from going bankrupt again in the future, and delays may also occur depending on the amount you owe and to which creditors.
Your bankruptcy claim may also be delayed by a number of different people such as trustees, creditors, the Office of the Superintendent of Bankruptcy or even the court. Depending on your situation, you may need to attend hearings, answer questions under oath or even meet certain criteria before you can be discharged.
So what are the alternatives to bankruptcy in Prince George?
There are a few common alternatives to bankruptcy that are worth consideration:
- Debt consolidation is an option that consolidates all of your debts into another loan, effectively erasing the interest you’ve built up and allowing you to pay back just a single lender with a lower interest rate.
- Debt settlement involves paying back only a portion of your debt. It involves giving creditors a lump sum of money and effectively ending your debt there. While it sounds like a bad deal or creditors, you’d be surprised at how often this option works.
- A consumer proposal is a bankruptcy alternative that could reduce your debts by up to 80%. You’ll still need to pay back the remaining debt, but you can extend the duration to five years and you’ll pay no interest on the remainder that you owe.
The best option for your situation will greatly depend on your current financial circumstances. If you’d like to learn more about these bankruptcy alternatives in Prince George, BC or want help choosing the right one for your needs, get in touch with us today and we’d be happy to help you.