Bankruptcy Is Not Your Only Option!
Finding yourself in debt can be scary, and bankruptcy is often the first word that pops into people’s minds when they think of ways to get out of that debt.
In 2018 alone, 128,846 insolvencies (including bankruptcies) were filed with the Office of the Superintendant of Bankruptcy (OSB).
That number was up over 2% from the previous year.
The current unemployment rate as of June 2020 is over 13%, so it’s expected that more people will fall into debt and need help getting out.
Thankfully, bankruptcy isn’t the only option.
One of the best alternatives is a Consumer Proposal.
What Are the Drawbacks of Bankruptcy?
Most people don’t want to have to file for bankruptcy because of the risks that come with it.
Some of those risks include:
- You could lose your non-exempt assets, including your house or vehicle.
- A note will remain on your credit report for six years.
- If you have a higher income, your payments will be high.
- You have to report your income every month.
Usually, the biggest drawback for people is the idea of losing their home or other valuable assets.
But, if you’re in debt and need to get out, there is another way to get the help you need without losing anything.
Filing For a Consumer Proposal
If you’re in debt, consider filing a Consumer Proposal instead of bankruptcy.
A Consumer Proposal allows you to work with a Licensed Insolvency Trustee to negotiate with your creditors.
You’ll agree on a portion of your debt to pay back, usually anywhere from 20-50%, so you don’t have to worry about the full amount.
Once that financial amount is agreed upon, your creditors cannot come after you as long as you fulfill the terms of the agreement and make your monthly payments.
As you make payments, there is no interest rate to worry about, so every cent you pay goes directly to eliminating your debt.
In addition to no interest, there are no additional fees or penalties to worry about, either.
It’s a much more straightforward process that is easy to understand.
Unlike bankruptcy, your assets cannot be touched when you file for a Consumer Proposal.
Your credit can be affected, but not for as long, and the connotation of seeing a Consumer Proposal on your credit report doesn’t seem as scarring to most people as seeing bankruptcy.
Is a Consumer Proposal Right for You?
It’s good news that bankruptcy isn’t the only option for people in debt.
No one wants to think about having to lose their home or their vehicle, only to work toward a process that can feel overwhelming to your financial situation.
Consumer Proposals are often better options, depending on your situation.
The best thing you can do is to talk with a Licensed Insolvency Trustee to learn more about how you can get out of debt safely and effectively.
If you’re struggling to find a solution, contact Bankruptcy Canada today to set up an appointment with one of our experienced Licensed Insolvency Trustees.
It just might be the first step on your journey toward being debt-free!