You’re struggling with debt and you can’t see a way out of it. There isn’t enough money to keep up with all your debt payments and now late penalties and interest rates are getting out of hand. You should be aware that bankruptcy is not your only option.

Bankruptcy isn’t always bad, but it’s better to have options. Sometimes going through bankruptcy can make more sense. Let’s say you were young, rented an apartment, owned a second-hand car, and didn’t have any major investments outside of an RRSP, if at all. You would wind up having to give up very little in a bankruptcy, aside from potentially paying surplus income (which is based on your income and family size).

That changes when you have significant equity in your home, non-RRSP assets, second properties, more equity in your vehicle (or vehicles), etc. In that case, you want to learn how to avoid bankruptcy with a consumer proposal.

Don’t Wait to Get Bankruptcy Help

First you have to start looking for answers sooner than later. Don’t delay, as that can wind up putting you in a tighter spot. Your creditors may even be able to force you into bankruptcy if it looks like you’re attempting to avoid paying them. These acts include “ignoring” your creditors and refusing to make any efforts to pay. They will get in contact with you by phone, email, letter – anyway they can. Then they may hire a collection agency, and finally, they may get a judgement against you that could wind up with your bank accounts frozen or seized to pay creditors.

It’s always better to seek help first. A bankruptcy trustee, now known as a Licensed Insolvency Trustee, is a professional who can help you file for, or avoid, bankruptcy.

Get Out of Debt with a Consumer Proposal

One of the most effective ways to avoid bankruptcy and get out of debt is with a consumer proposal. A consumer proposal comes with many of the same benefits as bankruptcy, including:

  • Forcing your creditors to stop contact and actions to collect immediately
  • Reducing your total unsecured debt
  • Stopping interest payments on the debt that you owe
  • Providing relief and time to catch up with other types of debt, including your mortgage or car payments

A consumer proposal comes with some of the downsides of a bankruptcy as well, primarily appearing on your credit history and preventing you from borrowing for a period of time.

How Is a Consumer Proposal Different?

A consumer proposal protects assets that might otherwise have to be sold in a bankruptcy. Instead of losing your assets, you pay your creditors a fixed monthly sum, agreed to when you file, for up to five years.

How much will that monthly payment be? This is what bankruptcy trustees like David Sklar & Associates can help you find out when you book an appointment. It will be based on several factors, including:

  • Your monthly income
  • Your necessary expenses
  • How much money you owe
  • And how much your creditors will agree to

These are all things that bankruptcy trustees will look at. You can get started with a free consultation with bankruptcy trustees like David Sklar & Associates.

Bankruptcy is not your only option. Visit a bankruptcy trustee today and find out if you can benefit from a consumer proposal.