What Are The Bankruptcy Alternatives In Canada

Many honest and responsible people find that they cannot meet their monthly payments and other financial commitments and wonder what are the alternatives to bankruptcy in Canada available to them. Despite good intentions, they can no longer make their debt payments.

When this happens, RESPONSIBLE people discover that there are only a limited number of RESPONSIBLE options open to them.

• CONSOLIDATION LOAN
• INFORMAL ARRANGEMENTS
• PROPOSALS
• BANKRUPTCY

Consolidation Loan

When confronted by “The Problem”, the first thing most people try to do is to consolidate their debts. Viewed by many as the best alternative to bankruptcy, this will usually mean lower monthly payments. It also means it will take longer to pay off.

A debt consolidation loan will help keep their good credit rating and should relieve the monthly payment pressure. However, when their credit rating has already deteriorated, or if they lack collateral, they may not be able to get such a loan. They may need a co-signor or guarantor, which may be impossible for them to find. If you have not investigated the possibility of consolidating your debts, you should.

Informal Arrangements

Informal arrangements” The Problem” can sometimes be solved, at least temporarily, by negotiating with the creditors to reduce the monthly payments.

This can be done by direct negotiations or through the services of a counselling agency or solicitor. Informal Arrangements allow a person to work their way through a temporary financial problem for a relatively low cost. On the other hand:

• They can be very difficult to negotiate
• They do not stop a creditor from suing
• They offer no protection from a Garnishee
• They don’t usually stop interest accumulation
• They normally need to be accepted by 100% of the creditors to be effective

There are many less-than-scrupulous people out there who may try to take advantage of your situation. Use a solicitor, accountant, trustee, or well-recognized agency.