If you are currently drowning in a sea of debt, you’re not alone.
Millions of Canadians are living with overwhelming debts and life-restricting financial problems, but those issues should not become a life sentence.
When you make the right moves, it is possible to rid yourself of debt once and for all.
Simple lifestyle changes and financial coaching may provide the answer for individuals with minor money worries.
However, when you are trapped by significant and mounting debts, legislated debt solutions for Canadians are the answer.
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What are the Legislated Debt Solutions in Canada?
When looking at possible debt solutions, you may encounter an extensive range of tools and tactics.
As far as legislated debt solutions for Canadians are concerned, though, there are only federally legislated options available – bankruptcy and consumer proposals.
Under the right circumstances, the incentives for using these options are plentiful.
Perhaps most tellingly, though, they are the only debt relief solutions that protect you from creditors throughout the process.
Not only does this buy you a little time, but it also puts an end to nuisance debt collector calls.
This occurs due to the fact that both financial resources are automatically supported by a ‘stay of proceedings‘, which additionally prevents creditors from seizing your assets or garnishing your wages.
It allows you to instantly remove a weight of stress from your shoulders before working your way to a brighter financial future.
Which Legislated Debt Solution is Best?
Over 130,000 Canadians will use one of the legislated insolvency solutions this year.
Ultimately, the right decision needs to be made on a case-by-case basis due to the extensive list of variables.
Therefore, you need to familiarize yourself with both.
The consumer proposal is Canada’s most commonly used alternative to bankruptcy.
It allows you to settle your unsecured debts at a much lower cost while also extending the repayment plan to five years, which can make monthly payments far more affordable.
A consumer proposal targets all unsecured debts in one go, consolidating them into one monthly payment.
The proposal is made based upon your financial situation while offering creditors more than they’d gain from bankruptcy.
If over 50% of the creditors accept the deal, all others must follow suit.
Consumer proposals cause far fewer financial repercussions than bankruptcy filings while it’s also easier to hold onto assets, which makes them the preferred route for many.
Filing for bankruptcy is largely seen as a last resort.
However, if you have no other way of paying the mounting debts, it is the best way to gain a fresh start.
Once the bankruptcy process has been finalized, you will be discharged from the unsecured debts, meaning you are debt-free.
Defaulting on all of your unsecured debts to creditors will result in financial restrictions while it will also impact your credit score for at least seven years.
Nonetheless, personal bankruptcy can make a lot of sense in many circumstances.
Over one million Canadians believe that they are close to bankruptcy.
If it is the right option for you, it’s better to complete the process and start rebuilding sooner rather than later.
Completing Your Legislated Debt Solution Process
Whether it’s bankruptcy or a consumer proposal, only a licensed insolvency trustee has the power to represent your case and complete the necessary paperwork.
Here at BankruptcyCanada, we can help you through every step of the process.
From discussing all avenues in detail to establishing financially responsible habits following the completion of the procedure, we’re on your side.
To find out more about building a better long-term financial situation, get in touch today.
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?