Debt Options

Looking for an alternative to bankruptcy but not sure which way to turn?

Below are some options to consider before filing personal bankruptcy.

Do Nothing

  • Costs nothing, but you’ll face potential legal action that would include a possible wage garnishee, lien being placed against real estate you own and/or bank accounts being frozen
  • Only viable way to deal with debts would be to increase income or cut your expenses
  • Credit rating likely to be rated R9 if debts go to collections

 

Consolidation Loan

  • You may require security (collateral) or a co-signor to qualify
  • Could be hard to qualify if you already have a bad credit rating
  • Be careful of high interest rates as the cost of borrowing could be costly each month
  • Interest rates at some lenders can be as high as 30% or over
  • Credit rating remains at current R rating provided you maintain payments on the loan


 

Debt Management Plan (Non for profit Credit Counselling)

  • Can be cheaper than debt consolidation
  • Creditors happy you’re offering to plan to pay all debts back
  • May not be affordable if you have a low income
  • All creditors may not agree
  • Cannot include tax debts
  • Credit rating likely to be rated R7 and to remain R7 for 2 years after completion

 

Debt Settlement

  • Settlement can be negotiated on principle debt
  • Usually, no action will be taken by debt settlement firm to protect you from your creditors until you have the funds available to offer
  • Debt Settlement company will encourage you to wait and save up money to offer to creditors, but when making the offer creditors may not agree
  • You’ll continue to receive harassing phone calls
  • Debt settlement companies are not licenced by the federal/provincial governments and not necessairly trained professionals
  • Credit rating likely to be rated R9 if debts go to collections

 

Consumer Proposal

  • Companies offering to help you file a Consumer Proposal are  licenced by the government to do so
  • You can negotiate to repay only a portion of the debt you owe
  • Interest is frozen at the date you file
  • If accepted by a majority of your creditors (50% +1) it is legally deemed to be accepted by ALL of your creditors
  • Your creditors are “stayed” (legally restricted) from taking any legal action against you
  • Wage garnishments (except for support and alimony) can be immediately stopped
  • Peace of mind of “avoiding bankruptcy”
  • Credit rating likely to be rated R7 and to remain R7 for 3 years after completion

Whatever options you consider, the most important thing to remember is to call us first at (519) 622-3773 or if you prefer, send us an email.

We’ll review your personal situation and guide you through all the options available in the hopes of allowing you to make the best informed decision as to which method would be the best for you to bring your finances back on track.

The key is, set your priorities. Watch the video to learn more