Bankruptcy Alternatives in British Columbia
Bankruptcy is a serious legal proceeding that should only be used when absolutely necessary. While bankruptcy can help many people in financial trouble, there are also many bankruptcy alternatives that may be better for you. Smythe Insolvency is here to help you explore your bankruptcy alternatives to see if you can avoid filing bankruptcy. There are times when bankruptcy is your best, and possibly only, option, but it does come along with consequences. Our team has helped many people through challenging financial times and no matter what led up to your financial situation, the good news is that you have multiple options when it comes to avoiding bankruptcy. Here is a look at a couple alternatives to bankruptcy. Contact us today to book a free consultation.
All About Bankruptcy & Its Consequences
If you’re considering filing for bankruptcy, you need to know precisely what it means and what the financial repercussions are. Let’s take a look at some of the negative consequences associated with filing for bankruptcy in Canada:
- Cost – You will be required to make bankruptcy payments based on your income. You will also have to pay administrative fees for filing for bankruptcy.
- Credit – Filing for bankruptcy will negatively affect your credit rating. It will be reported on your credit report for six years after you’re discharged from your bankruptcy for the first time and it will remain on your credit report for 14 years if you’ve been bankrupt more than once.
- Assets – If you file for bankruptcy, you will lose any of your non-exempt assets. You may be able to keep your vehicle and some non-exempt assets including RESPs and contributions to your RRSP in the past 12 months.
- Duties – In order to get discharged from your bankruptcy, you have certain duties to perform. These include reporting your monthly income, making your payments, attending two credit counseling sessions, and providing your income tax information.
While our team provides help with bankruptcy, we also encourage you to explore all your options.
The Best Bankruptcy Alternatives
Our team would be happy to determine if bankruptcy is right for you. For many Canadians, there are better options. Learn more about the best bankruptcy alternatives:
- Personal Budgeting – Creating a personal budget is a tool to help you manage your income and expenses, track your monthly spending and pay down your debt. Determine how much money you’re making, set aside money for your needs each month (rent, hydro, groceries, etc.), and use the remainder to pay off your credit card debt or start an emergency savings fund. If the cost of your monthly needs far outweighs your monthly income, it might be time to consider calling a Licensed Insolvency Trustee.
- Debt Consolidation Loans – A debt consolidation loan can combine several of your outstanding credit cards or bank loans into one loan and payment. These loans often have a lower interest rate, but you’ll still have all your debt. This option can make your payments more manageable.
- Debt Management Plans – This type of plan allows you to consolidate your monthly debt payments without needing to qualify for a new loan. This plan may be an excellent option if you only want to consolidate a few small debts or you have poor credit and would not qualify for a low-interest consolidation loan from a traditional lender.
- Informal Debt Settlements – If you have debts that are mainly small and relatively old, you might be able to settle them with your creditors for a lower amount than you owe. In some cases, they will accept about 50% of your overall debt, but it helps to have an experienced insolvency firm to assist you.
- Consumer Proposals – With this option, a licensed insolvency trustee will negotiate with your creditors on your behalf. Consumer proposals can help you to negotiate an extremely low settlement. Many times, creditors will accept less because it’s better than getting paid nothing at all, making it a win-win for you and for them.
- Credit Counselling – This option helps you determine the underlying cause of your financial difficulties so you can avoid making the same mistakes in the future. You’ll learn valuable financial management skills, budgeting strategies, and more. You’ll learn how to rebuild your credit and get a fresh start financially.
Book Your Free Consultation Today
In some cases, bankruptcy may be your best option, but that’s not always the case. Smythe Insolvency can help with your filing for personal bankruptcy as well as advise you on your other options. We would be happy to provide you with a free consultation where we will understand the big picture of your financial situation and offer options that may work best for you. Contact us today to get started.