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What Bankruptcy Alternatives Are Available to Me?
You can’t pay your bills, and solutions you have considered include money management skills, a debt consolidation loan, and credit counselling with a debt management plan. Here are some more alternatives to bankruptcy in Canada.
| 4. | Orderly Payment of Debts | |
| An Orderly Payment of Debts program can be arranged with your creditors, with a single monthly payment geared to what you can pay, lower interest costs, protection from legal actions, and extensive help to learn financial skills (available only in Alberta, Saskatchewan, PEI, and Nova Scotia). | ||
| 5. | Make a Consumer Proposal to your creditors | |
| A bankruptcy trustee can make a consumer proposal to your creditors, in which you make set payments you can afford for up to five years, which are distributed to your creditors. It may be a great bankruptcy alternative if you have more debts than you can handle, but a stable source of income. |
| As soon as the proposal is filed, your creditors are prevented from taking you to court or garnisheeing your wages. They have 45 days to accept your proposal. Once accepted, a proposal is legally binding on all your creditors and stops all legal actions against you. In most proposals you end up paying no further interest on your debts, and you pay less than the full amount owing, because your creditors would rather accept a deal where they get something, than have you file for personal bankruptcy where they will get less. A proposal is better than bankruptcy for you too. You get to keep your house and other assets. At the end of the proposal period, your debts are discharged, and your credit is not as badly affected as in a bankruptcy. |
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| 6. | File for bankruptcy. | |
| Bankruptcy in Canada is your final option. If you cannot pay even a significant fraction of what you owe, you can file for bankruptcy, through a bankruptcy trustee. |
What should I do?
Since bankruptcy is a serious step, make sure you have checked every one of the available alternatives to bankruptcy. Take action now, to deal with your bills and get peace of mind.
Get help! With an experienced professional, you can learn about the bankruptcy alternatives in Canada that may be suitable in your case. Contact us for a free consultation to discuss your specific situation.