Debt Relief in Canada: Your Alternatives to Filing for Bankruptcy

Realizing that you are in debt is enough to put you at your wit’s end. This is no time, however, to panic and make rash decisions such as filing for bankruptcy; after all, it’s not the only option you have for settling your debts and if anything, bankruptcy should be considered a last resort. Here are some other options for debt relief in Canada that you should consider before filing for bankruptcy.

File a Consumer Proposal

Under the Bankruptcy and Insolvency act, a consumer proposal is a formal procedure offered to all your creditors that proposes new terms for payment. Your creditors can choose to accept or decline your offer but if they accept, you can pay reduce the amount of debt you have and pay over a period of time up to 5 years.

Try Informal Proposals

This solution is the counterpart of filing a consumer proposal and requires you to be in direct contact with each of your creditors to draw up a plan for settling your debts. The creditors will consult your financial details to determine whether they can make better returns as opposed to you declaring bankruptcy. Informal proposals can be among your best options for debt relief especially if you have sufficient knowledge or if you are in contact with an expert in debt.

Going Solo

If you think your debts are still small enough for you to handle yourself, you can certainly try to settle your debts on your own.  You can do this by really looking at where the problem lies – your budget. It is a good idea to track how much money you are making versus how much you are spending. If you find that you are putting out more than you are bringing in, come up with a more controlled spending plan with an emphasis on paying down your debt.

Another option is to sell your assets. This is one of the most common solutions, for people although it might just be a temporary one. While you could try handling your debt by yourself, it will be far wiser to enlist the aid of Debt Relief Consultants like Blair Greenwood. Do this and you’ll soon be ready to start anew.

(Source: You Owe Money — Your Options, Industry Canada)