Bankruptcy Alternatives in Winnipeg

 

Bankruptcy seems like the obvious choice when dealing with significant debts, but could another option be more suitable? Bankruptcy can take 9 months to process, remaining on your credit file for years after discharge.

 

Exploring bankruptcy alternatives in Winnipeg could help you find a different solution to dealing with your debts. We talk you through some of the options below.

Does your debt qualify for bankruptcy?

In some circumstances, bankruptcy can be the right solution for handling spiralling debts. But it’s not something to be entered into lightly. You’ll need to assess your debts to see if they can be included in your bankruptcy, with some exclusions 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.

 

A Licensed Insolvency Trustee will be able to take a closer look at your debts to help you decide on the best solution for dealing with your debts.

How bankruptcy works

The bankruptcy process can take around 9 months to complete. Provided you fulfil all of your duties and make the appropriate repayments, you will be discharged. Some of the bankruptcy duties outlined by a Licensed Insolvency Trustee will include: 

 

  • Making payments via your Licensed Insolvency Trustee to cover the fees associated with your bankruptcy.
  • Attending two credit counselling sessions.
  • Complete any other terms outlined by your Trustee.

 

Bankruptcy should be completed after 9 months if it’s a first-time bankruptcy. But if you fail in your duties or you there are additional payments to be made to your creditors, your discharge will be extended.

 

After completing your duties, you will be discharged from your bankruptcy.

The effect of bankruptcy on your credit rating

Bankruptcy has a long term effect on your finances. It will stay on your credit file for 6 years after discharge, which can have some serious consequences for your finances. You will find it difficult to obtain credit, which can have an impact on your plans if you want to buy a house, car or take out another form of credit. Taking the time to rebuild your credit rating and learning to manage your finances will help you build a stronger financial future.

Bankruptcy alternatives in Winnipeg

If you’re concerned about the risks that come with bankruptcy, then bankruptcy alternatives in Winnipeg could be more suitable. This could be a single solution or a combination of solutions to help you become debt-free.

Debt consolidation/repayment

Debt consolidation loans are suitable to those who can manage a budget well and afford the monthly repayments. You’ll only need to make a single payment for your debts, which could make things more manageable, while also reducing your overall repayments. You might find it difficult to get a low-interest loan if your credit rating is low, and this could make it difficult for you to afford your repayments.

 

Meanwhile, a debt repayment plan could help you reduce the amount you repay. A credit counselling organization can help you come to an agreement with your creditors which could reduce or stop your interest so that you can repay your debts quicker.

Debt settlement

A debt settlement plan can help you reduce your overall debt, but will depend on creditors agreeing to write off a portion of what’s owed and agreeing to a settlement amount. There are many companies claiming to be debt settlement companies, but many are scammers and need careful research before you hand over any money.

Consumer proposal

A consumer proposal is another solution to help you deal with debts, helping you to rebuild your finances and put an end to debt concerns. To file a consumer proposal, you will need to work with a Licensed Insolvency Trustee who will contact your creditors to agree a settlement plan. After completing a consumer proposal, it will stay on your credit file for several years, but you’ll be able to retain assets like your house as part of the settlement. Once your consumer proposal is complete, you’ll need to work on rebuilding your credit rating and attend debt counselling sessions to help you manage your debts more effectively in the future.

Choosing the right option for you

If you’re struggling with debts and want to know your options, talk to a Licensed Insolvency Trustee today. Starting with a free consultation, you could learn more about the different solutions for dealing with your debts and move forward with your Trustee to help you become debt-free.

Explore bankruptcy alternatives in Winnipeg and start your debt-free journey by calling (877) 879-4770.