Bankruptcy Alternatives in Sherwood Park

 

When facing up to your debts, bankruptcy is often one of the first debt relief options to come to mind, but it is important to remember that if you’re living in Sherwood Park, Alberta, then it isn’t the only option available to you. Debt comes in many different shapes and sizes, and although bankruptcy is a viable option for those who are insolvent, it is often considered somewhat of a last resort, and you may be surprised to learn that there are a number of other bankruptcy relief options that you can try before bankruptcy.

What is bankruptcy? 

Bankruptcy is a legal process designed to help those who are insolvent and unable to pay their debts. During the bankruptcy process, you as the debtor will be required to declare all of your debts and assets to a Licenced Insolvency Trustee so that they can liquidate your eligible assets in order to pay a proportion of your debt back to your creditors. Although bankruptcy has helped thousands of people to start a new financial slate, it’s important to realize that it isn’t for everybody. Some debts are excluded from the bankruptcy process including secured debts such as car loans and your mortgage, student loans that are less than seven years old and outstanding child and alimony support payments, not to mention if you have a lot of assets then you risk losing them during the bankruptcy process. 

Bankruptcy alternatives in Sherwood Park

The good news is that if you are in debt in Sherwood Park, then bankruptcy isn’t your only option. There are a number of alternative debt-relief options available that can help you to organize and repay your debts, these include:

  • Credit counselling.
  • Debt consolidation and debt repayment plans.
  • Consumer Proposal.

Credit counselling

Credit counselling is a broad debt relief service designed to assist people with varying degrees of debt. A credit counsellor will be able to sit down with you to help you calculate the extent of your debt, will be able to provide you with budgeting advice and assist you with creating household budgets and will also be able to run through the other debt-relief options that are available to you. Many people find that credit counselling is all they need to get a handle on their financial situation, but for those with more serious debts, the service can be used in conjunction with other debt-relief options. 

Debt consolidation and debt repayment plans

Two of the debt-relief options that your credit counsellor may discuss with you are debt consolidation and creating a debt repayment plan. Debt consolidation can be extremely useful for those with multiple debts, allowing them to consolidate multiple repayments to multiple creditors into one single debt payment that is more manageable and easier to keep track of. There are quite a few different types of debt-consolidation available from debt-consolidation loans, to simply consolidating your monthly repayments into one lump sum that your Trustee will then distribute to your creditors. When working with a Trustee to consolidate your debts or to create a debt repayment plan, your Trustee will liaise directly with your creditors to come up with a repayment schedule that is affordable for you, often also securing you a lower interest rate, therefore, lowering the total amount you need to repay.

Consumer Proposal

For larger, less manageable debts that you will struggle to pay back alone, then another alternative to bankruptcy in Sherwood Park is to file a Consumer Proposal with a Licenced Insolvency Trustee. A Consumer Proposal is an agreement between you and your creditors in which you will be required to make agreed monthly repayments to your creditors over a set time period of up to five years. After the agreed time period, any remaining outstanding debts with your creditors will be dissolved allowing you to start afresh. Consumer Proposal is a popular option for those facing bankruptcy but who do not wish to lose any of their assets, allowing them to keep everything that they own while still dealing with their debts. 

Knowing which debt-relief option to choose

Everyone’s personal financial situation is different, and there’s no easy answer as to which debt-relief option will be right for you, therefore the best way to find an alternative to bankruptcy in Sherwood Park is to speak with a Licensed Trustee. Here at Bankruptcy Canada, we can help to connect you with one of more than 430 Licenced Trustees across Canada, helping you to start a journey towards a life that is debt-free. All of our Licenced Trustees can provide you with a no-cost and completely confidential meeting to discuss your financial situation and the debt relief options available to you, so don’t delay, get in touch with us today on (877) 879-4770 or by filling out one of our online forms.