You might think that there are only a couple of possibilities for dealing with your debt in Canada.
However, this is not the case and the reality is that there are numerous ways that you can handle your debt and ensure that you are tackling it the right way.
However, there are only two that are supported through legal regulations.
You might be curious which is going to benefit you and this could depend on the type of debt that you have.
For instance, you might owe money to the government.
Here’s how these relief options impact this type of debt.
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A Medical Service Plan
It’s possible that you are required to pay a certain MSP premium and ultimately end up with a significant outstanding balance.
Regardless of whether you choose to opt for a consumer proposal or a bankruptcy, this is going to be eliminated.
Be aware that MSP premiums are always based on tax returns.
So, you do need to make sure that you are up to date if you want to gain support here.
It’s possible that you are over the seven-year threshold since you have left school.
If that’s the case, then you can be released from your student loan debt regardless of whether you choose a consumer proposal or a bankruptcy.
Even if you are not at the 7-year point, you can still get relief with these options.
You can think about applying for your student loan to be relieved through bankruptcy as early as 5 years after you finish school.
Income Tax Debt
If you have an outstanding debt with the Canada Revenue Agency, then you can include this in your bankruptcy or even your consumer proposal.
That includes if you have fallen behind on paying income tax or even corporate tax.
However, a consumer proposal is the only option that will allow you to negotiate to pay a reduced balance compared to the one that you owe to the CRA.
Get The Facts
If you are struggling with debt that you owe to the government rather than private creditors, then it’s important to get the facts.
You need to make sure that you understand your position here.
Penalties and interest can grow quickly and the CRA can be one of the most powerful creditors who will put you in a significant level of financially risk.
You should make sure that you contact a licensed insolvency trustee.
They will be able to help you navigate both options available to you and ensure that you are on the right track.
If you need more support, please contact us today or fill out a free evaluation form through our website.
We have helped countless Canadians with their debt relief and we are confident that we can support you too.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?