Debt problems develop slowly. A few extra payments, an unforeseen expense charged to your credit card, or the use of a payday loan to bridge a cash flow gap sets the ball rolling. You know you have more debt than you can handle at some point. This does not mean that you must file for bankruptcy.
How to Prevent Bankruptcy With Debt Reduction Solutions?
These debt-reduction tactics can help you avoid bankruptcy. Bankruptcy is overkill if you only have a few debts or one old account in collections. The majority of the people we assist are able to work their way out of debt on their own. It isn’t a quick fix, but it is possible to pay off debt with dedication and the appropriate technique. Consider these simple ideas for finding money to put toward debt payments to avoid bankruptcy.
- Some assets should be sold
- Cost-cutting
- Find a second source of revenue
- Payments should be doubled
- Negotiate terms of repayment with your creditors
The objective behind good debt management is to increase payments to your unsecured creditors as much as possible.
Debt Solution Alternatives to Bankruptcy
If you have more serious debt troubles, you’ll need more debt assistance that a few budget tweaks can supply – you’ll need debt relief. Even yet, bankruptcy should only be used as a last resort, and you should first examine the following bankruptcy alternatives:
Debt Consolidation –
You may be eligible for a debt consolidation loan if your credit score is still good. Debt consolidation makes sense if you can save money and get a lower interest rate. Make sure you can afford to make the payments; if you can’t, you risk losing whatever assets you’ve pledged as security.
Credit Counselling –
If you can afford to pay off all of your bills and need assistance establishing a repayment plan, credit counselling can assist you. For this option to work, you must be able to repay this amount. Credit counselling, like any other formal debt repayment program, will appear on your credit record.
Consumer Proposal –
A consumer proposal is the most popular alternative to bankruptcy in Canada. A consumer proposal is an agreement to repay a part of your debts that is submitted with a Licensed Insolvency Trustee. You are not bankrupt if you file a consumer proposal. This means you don’t have to give up your property as you would in a bankruptcy. A consumer proposal, as a legal procedure, binds all creditors if at least half agree to the proposal’s provisions.
When is bankruptcy your only option?
When you are unable to repay your obligations and living with them is a financial hardship, personal bankruptcy is used to give you a fresh financial start. If your income isn’t high enough to make a proposal to your creditors, and you don’t have any assets that the trustee may seize, bankruptcy may be a viable choice.
Getting Help
If you can’t pay your debts, bankruptcy is not your only option. Contact us at [email protected] today to begin the process of exploring your options to avoid bankruptcy while dealing with your debt.
Disclaimer: Canadian-debtrelief.com is a debt consultancy service, we are not an authorized blogsite and are only advisors providing you with the tools and information to help you get out of debt.
