Debt management programs
I am in financial trouble.My debts are quite significant. The interest rates on the credit cards are very high ,I will never be able to pay my debt off.I looked into a debt mangement counselling service and bankruptcy. I dont own any assetes and my salary is not high. What are the benefits of choosing a debt management service over a bankruptcy?
I see no financial benefit of using a counselling service.With bankruptcy you can be out of debt in a year .With the program it is another 4-5 years of struggling the same way I am now . Does using a counselling service look better than a bankruptcy to your credit report. My friend told me that he thought my credit report would look worse than if i go bankrupt.
A debt management plan is a great alternative to bankruptcy in certain situations. For example, if you have a manageable amount of debt and can afford to pay it off over a period of two or three years, a debt management plan is a good way to do it, usually without interest.
However, if you owe more than you can repay in a three or four year period, a consumer proposal or bankruptcy may be a better option.
A debt management plan or a proposal generally appear on your credit report for three years after all payments are made. A bankruptcy remains on your credit report for six or seven years after you are discharged.
The correct answer for you will depend on your situation, so I recommend you contact a licensed trustee to determine which option is best for you.