Bankruptcy Alternatives in Woodstock
When you are in a tight financial situation, bankruptcy may seem like your only hope. However, before you make your decision, check out the alternatives, and how they could be even better than bankruptcy, below.
Bankruptcy doesn’t cover these debts.
First of all, going bankrupt doesn’t necessarily mean all your debts are erased magically. Unfortunately, many people believe this and therefore negate to explore the other debt management options that are available to them.
In particular, there are three types of debt with which bankruptcy will leave you. The first of these is child support, and alimony resulting from a divorce. While the second is what is known as a secured loan. That is anything you have to pay a deposit on to obtain such as a car, or mortgage. Finally, the dreaded student loans will also be left untouched by bankruptcy. Something that means you will have to carefully consider how effective going down this route will be for your particular situation.
How long does bankruptcy take?
Many people think that to declare themselves bankrupt is a fast and easy process. Sadly, this is not the case. Bankruptcy usually takes around 9 months to complete all the stages necessary. Such stages will include attending financial counselling sessions, making payments to your trustees, and liquidating any assets you have.
The nine-month time scale is if things all go smoothly as well. What that means is your bankruptcy discharge can stall, if you need to attend a court hearing, or if the Superintendent of Bankruptcy has queries with your case.
Bankruptcy impacts your credit
Before you choose bankruptcy, it is also vital that you know it can severely impact your credit. This impact is not just for the duration of the process but can be up to 7 years after as well. Unfortunately, that means if you do decide to go through with a bankruptcy, you may find it challenging to get credit in the future.
Probably the most problematic issue that can arise from this is that you may struggle to get or renew your mortgage. Something that could mean a drastic change in your living circumstances, although, many people also struggle to get approved for car loans and credit cards as well.
The good news is that there are plenty of alternatives to bankruptcy that you can consider. Read about the most beneficial ones in the section below.
Debt consolidation involves working with a provider to find a single loan that will cover all of your debts. The idea is that this then allows you to make a single monthly payment.
The advantage of this is two-fold, with the first being that the payment is often much more affordable. Secondly, with only a single amount to worry about, missed deadlines are much less common. Therefore, so too are the fees and bad marks against your credit associated with them.
There is no need to worry about issues with getting credit with the solution either. The reason being that consolidating your debts formally in this way involves your provider buying or negotiating responsibility for what you owe. Therefore, you do not need approval for credit in the traditional sense of a loan, something that can be a significant issue when it comes to those struggling with debt.
Just be sure to pick a debt consolidation provider that works on a not for profit basis. Then you will have the best chance of getting lower monthly payments and staying out of any further debt.
Another option to consider is debt settlement. This opportunity is different from consolidation because it is not about paying back the total debt you owe. Instead, the debt consolidation providers you work with will negotiate a partial repayment with your debtor, who will then agree to cancel the debt.
However, this option is not suitable for all, as it does require a lump sum to pay off the settlement. Also, not all those you owe a debt to may be willing to go for this option. However, you may be surprised by how many companies do see the good sense in this. After all, getting back some of what they are owed sooner, than waiting for a long drawn out repayment process.
Finally, in some circumstances arranging a consumer proposal may be the right alternative to bankruptcy. Such a solution may be more beneficial financially as well as they are often at a much lower rate than bankruptcy.
Which option should you choose?
With so many options to consider, including bankruptcy and its alternatives, it can be tough to know what to do. Happily, there are debt and bankruptcy specialists out there that can help. Non-judgemental experts that can answer your questions offer advice tailored to your needs and help you explore all the options.
To that end, if you are looking for Bankruptcy Alternatives in Woodstock, why not give us a call on 1-877-879-4770 or complete the form below? Our trusted and empathic advisors will be only too happy to help you find a solution to your debt problem that works for you.