Bankruptcy Alternatives in Vancouver
Once debt starts spiralling out of control, it’s important to look for solutions. The first thing that might come to mind is bankruptcy as a way of clearing your debt and enjoying a fresh start. But there is much more to bankruptcy than that, and it’s something that can last for years on your credit file.
Before deciding to file for bankruptcy, it’s worth exploring all of your other debt management solutions first. Here we detail your bankruptcy alternatives in Vancouver.
Does your debt qualify for bankruptcy?
Declaring bankruptcy isn’t a ‘one-size-fits-all’ solution for debt. While it can include your loans and credit card debts, there are some things your bankruptcy won’t cover, including:
- Student loans (if they are less than 7 years old).
- Secured debts (such as a car loan or mortgage).
- Child support and alimony payments.
Meeting with a Licensed Insolvency Trustee will help you establish which debts can be covered under bankruptcy, helping you make the best decision for your circumstances.
How bankruptcy works
When you file for bankruptcy, you can expect a long road ahead of you. It can take up to 9 months to complete the process. Some of the steps you’ll need to take include:
- 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.
While most bankruptcies are completed after 9 months, it could take longer if you have to make additional payments to your creditors. Your Trustee will go through all of your assets and decide whether any will be sold in order to pay your creditors.
Once you meet all of the duties set for you, you’ll be discharged.
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 Vancouver
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.
Debt consolidation allows you to cut the number of payments you need to make, and could reduce your overall interest too. But for many people, issues with debt mean poor credit, which can make it difficult to get a favorable loan rate. You’ll also need to be able to manage your budget effectively to ensure your monthly repayments are covered.
Meanwhile, a debt repayment plan could be a more appropriate option. A credit counselling organization could help you negotiate with your creditors to reduce your interest/repayments to make your repayments more affordable.
Debt settlement plans could help you reduce how much you owe overall, with your creditors agreeing to be repaid a certain amount instead of the entire sum that you owe. Debt settlement companies could help with this, but it’s important you do your research and make sure you don’t get caught up in a scam.
A consumer proposal is another potential alternative to bankruptcy. A Licensed Insolvency Trustee can arrange this for you, with your creditors agreeing to 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
Finding the right solution to your debts can be overwhelming, with many options available to you. To help you decide on the best course of action, meet with a Licensed Insolvency Trustee. They can assess your unique circumstances to make recommendations for how you can deal with your debts. With a free consultation, you can take the first steps towards becoming debt-free.
Explore bankruptcy alternatives in Vancouver and find your debt solution today by calling (877) 879-4770. Lines are open 24/7 to help you get the help you need.