Exploring Debt Relief Alternatives To Bankruptcy

Apr 18, 2024 | Bankruptcy

Written by C. Buhler & Associates Ltd.

Written by C. Buhler & Associates Ltd.

Are you feeling overwhelmed by debt and tired of being hounded by creditors night and day? Financial issues can be one of the most stressful problems in your life, but filing for bankruptcy might not be the best solution. It’s important to know that there are alternatives to bankruptcy that could set you up for a brighter financial future. 

Here are a few methods you may want to consider to get your debt under control:

Consumer Proposals

When you are unable to liquidate your current assets or simply don’t want to part with them, you may be able to arrange a consumer proposal with your creditors. A consumer proposal is a formal agreement between you and your creditors about what you can reasonably be expected to pay month after month. 

You will need to work with a licensed insolvency trustee to enact a consumer proposal. The longer you can stick with your commitment to paying down your debt via this method, the sooner you will achieve relief from creditors and become debt-free. 

Alternatively, you could liquidate your assets to pay down some of this debt in one lump sum. This could be a great first step for a consumer proposal if you can lower initial debt and show the creditors that you can be trusted to repay in good faith. 

Debt Consolidation Loan

Debt consolidation might be a smart move if you feel completely overwhelmed by the prospect of how many creditors you have, the different amounts, and the varying interest rates. Instead of making many payments to multiple debts, you can take out a debt consolidation loan. This is a loan that covers the entirety of your debt so that you can make just one single monthly payment. 

The benefit of debt consolidation loans is that they are usually at a lower interest rate compared to rates on your credit cards. 

You may qualify for this type of loan if you have a decent credit score and enough expendable income to reasonably afford the payments on the loan. Keep in mind that it may not be comfortable to make the payments, but it’s one of the best bankruptcy alternatives. 

Informal Debt Settlement

If your credit report is less desirable and you don’t qualify for debt consolidation, then you may want to consider arranging an informal debt settlement. Like the other bankruptcy alternatives found here, there are no shortcuts to getting your debt under control with this method. You will need to pick up the phone and reach out to each of your creditors individually. 

Talk about what your creditors accept as the minimum payment on your unsecured debts. They may be happy to see any progress on debt repayment, especially because they might not see any of that money if you file bankruptcy. 

This bankruptcy alternative allows you to negotiate interest rates and monthly payments and even sets up a timeline to give you some relief from persistent creditors. Discuss the arrangement with your licensed insolvency trustee before you make any decisions about what is in your best interest for your financial situation. 

Get Help Paying Down Your Unsecured Debt

Are you faced with the possibility of filing for bankruptcy to gain relief from creditors and overwhelming debt? C. Buhler & Associates Ltd. can help you get the help you need, whether you decide on debt consolidation, a consumer proposal, or bankruptcy. A licensed insolvency trustee is certified to walk you through all of your options, and can also provide you with credit counselling. 

If you’re ready to move on with your life, contact an insolvency trustee today! 

Similar Articles