Accumulating debt can become an unwanted companion in life. If you’re a resident of Manitoba dealing with this issue, you might be wondering, “What’s my fastest way out of debt in Manitoba?” To help you navigate this challenging time, we have laid out three primary ways to escape the debt trap.
1. Full Debt Repayment: The Traditional Approach
The primary and most straightforward method to get out of debt is the complete repayment of the owed amount. This strategy can be executed in two ways:
Voluntary Repayment: This involves diligently working and making regular payments until all debts are cleared. To effectuate this, establish a monthly budget that monitors your income and expenditures. The leftover amount, after settling your necessary expenses, can be allocated towards debt repayment. However, remember that the interest keeps adding up throughout the repayment duration. Hence, the current outstanding amount is not the ultimate sum you’d need to clear.
Forced Repayment: In this scenario, your creditor obtains a garnishment order against you, and the debt repayment is deducted directly from your paycheque. Once a garnishment order is in place, you’re left with limited options. The money keeps getting deducted until the entire debt is repaid, which can significantly reduce your disposable income. If you’re unable to pay the full amount at once, you might need to consider filing a Consumer Proposal or an Assignment in Bankruptcy through a Licensed Insolvency Trustee to halt the garnishment.
2. Consumer Proposal: A Negotiable Debt Repayment Plan
The second option to consider is filing a Consumer Proposal. This proposal is a debt repayment plan wherein you offer to pay your creditors an amount you can afford. This could be either the full amount or a portion of what you owe.
Your creditors can vote on whether they accept your ‘proposal’ or not. If the majority (by debt amount) vote in favor, the proposal becomes binding for all your creditors, irrespective of their individual vote. A Consumer Proposal can either be a lump-sum proposal or a repayment plan extending up to 60 months.
3. Assignment in Bankruptcy: A Swift Way Out
The third and often the fastest way out of debt in Manitoba is filing an Assignment in Bankruptcy. Like a Consumer Proposal, this is also filed through a Licensed Insolvency Trustee.
The duration of your bankruptcy depends on your household income and whether you have filed for bankruptcy before. If it’s your first time, your bankruptcy could end in either 9 or 21 months.
While in bankruptcy, you would need to make payments based on your affordability rather than the debt amount. The federal government releases annual guidelines indicating the cost of living for families of various sizes. Your payments will be based on these guidelines.
Making an Informed Decision: Seek Expert Advice
Choosing the right path to get out of debt quickly requires more than just identifying the quickest solution. It involves careful consideration of your specific financial circumstances and expert advice. A Licensed Insolvency Trustee (LIT) is a highly trained professional in the field of debt management who can guide you.
Contact Bankruptcy Canada to find out which option best suits your situation. With over 30 years of experience in helping Manitobans, they will review your income, household size, and debt profile to devise a customized plan to get you out of debt.
