A number of alternatives to bankruptcy exist for individuals who are facing financial difficulty. Listed below are various options which may be of assistance.
A Consumer Proposal to your creditors is a way to deal with an unmanageable debt load. Consumer Proposals are becoming a more and more popular way to deal with debt. Only a Licensed Insolvency Trustee can file a Consumer Proposal on your behalf. A Consumer Proposal allows you to reduce the debt you owe, extend the time you have to pay off the debt, or some combination of both without accumulating ongoing interest or additional fees.
Debt Management Program
A Debt Management Program (DMP) is a way of consolidating your unsecured debts without borrowing any money. It allows you to get out of debt by making one monthly payment that fits your budget. A DMP is, in reality, an interest reduction program. It does not reduce the amount of debt you owe to your creditors; it only reduces interest to a lower amount and perhaps even zero. But it does not lower the amount owing. You still pay your debts in full. Also, a DMP cannot include any government debt or secured liens.
To find out if a DMP is a good option for you, take the first step and contact Boale, Wood & Company Ltd. for a free personal financial assessment. We will discuss the pros and cons of the various options that can help you solve your financial problems.
If a DMP is a viable option for you, we can direct you to a reputable credit counselling firm that will be able to assist you in providing a free confidential assessment and explain all the aspects of a DMP.
Debt Consolidation Loan
You can approach a bank or financial institution about combining or “consolidating” your debts into one loan. The financial institution pays off all your debts and you only make a monthly payment to that creditor. There may be a qualifying process with the bank, and quite often, the bank will ask for a co-signor. In reality, this is generally not a viable option.
Before you go down the path of borrowing money and including a co-signor or co-borrower to assist you, meet with us to explore all your options. We are professionals in this field and have the expertise to give you proper direction to make an informed decision.
In some cases, we can work with you and your creditors to set up a payment plan that will allow you to pay your creditors in an orderly way and thus help preserve your credit rating. This operates similar to a debt consolidation loan except you do not borrow the money to pay off your creditors.
As a general rule, it is never a bad idea to have ongoing contact and dialogue with your creditors. You can explain to your creditors how your circumstances have changed and explain why you cannot make your agreed upon payments. However, silence will only lead to further collection action.
Call us, it’s not too late.