As Canada's population ages, the country is facing a looming financial crisis that doesn't garner…
Are you beginning to feel overwhelmed by debts that just keep building with no end in sight? Maybe you’ve missed a few mortgage payments, collections agencies have started to call, or worse yet, creditors have begun to garnish your wages.
An Ontario bankruptcy is certainly one way to get a fresh start from all that debt. But it is often considered a last resort, precisely because it significantly affects your credit score and ability to get a loan.
And while bankruptcy may seem like the only option, depending on your circumstances, you might have alternatives.
The absolute best thing you can possibly do when you encounter signs of financial distress is to get debt help immediately.
Here are four ways that you might be able to stave off – and entirely avoid – filing for personal bankruptcy.
#1. Reach out to a Licensed Insolvency Trustee.
No matter what type of action you take to resolve your debt, this is your first real step in achieving financial freedom.
Trustees are federally-regulated professionals that provide advice and service to businesses and people just like you with debt problems.
In fact, if you ultimately want to proceed with bankruptcy or a Consumer Proposal, trustees are the only professionals authorized by the Canadian government’s Office of the Superintendent of Bankruptcy to help you do so.
But that’s not all we trustees can do.
In your initial, free consultation, we review your financial situation, examine your available options, and help you understand how to avoid it all from happening again.
#2. Make a budget and plan your repayment.
Avoiding a personal bankruptcy may be as easy as reorganizing your budget so you can repay your creditors.
A trustee can help you figure out what your living expenses are and how much you owe. With this information, we help you create a manageable financial plan to repay your creditors.
You may need to make sacrifices to your daily lifestyle, including forgoing meals or coffee out, cancelling your cable so you can pay necessary utilities, like hydro, or taking on a second job. But consider these solutions temporary measures until you’ve repaid your debt.
Having a budget in place can also help keep you out of future money problems.
#3. Settle or consolidate your debt.
If you have a steady source of income and can manage making monthly payments, depending on who and how much you owe, debt settlement or consolidation might work for you.
Debt settlement plans involve negotiating with creditors about payment schedules, interest rates, and so forth, to get you on a payment schedule that works for you.
Debt consolidation means putting your bills and debts together into one new loan that you can afford to pay on a monthly basis. Again, it will require getting your creditors to waive or lower interest rates.
You might wonder why a creditor would agree to do any of the above. The answer is simple. They’ll get some repayment back, even if not the full amount pursuant to the terms of what they’re owed. That beats getting zero if you file for bankruptcy.
#4. File for Consumer Proposal.
This is a good option if:
● Your debt is less than $250,000;
● You can’t repay your loans in full; and
● You have a stable source of income.
A Consumer Proposal is usually the final option before filing for bankruptcy. The pros are that it reduces the total amount of debt you owe and consolidates it into a payment you can afford based on your income and assets.
The court and creditors must approve the Consumer Proposal. If they do, you will be obligated to make monthly payments. If you default, or if they don’t approve it, bankruptcy would be your only remaining option.
Get Debt Help in Ontario Today
If you’re experiencing financial difficulties, not only are your bills and debts mounting, but so is your anxiety. Don’t delay and make your situation worse by doing nothing. Contact us today so we can help you start on your journey to better financial health.