4 Options To Avoid Bankruptcy
Filing bankruptcy should be a last resort, to be used only if all other options won’t work for you. How can you avoid bankruptcy? Here are four options:
Debt consolidation. This is an option if you have good credit, or if you have a friend or family member is willing to co-sign a debt consolidation loan. If you have equity in your house, you could get a second mortgage and use the loan to repay your higher interest rate credit cards; to reduce the interest you are paying.
Debt settlement. If your debts are old, a debt settlement may be an option. In a debt settlement you offer to pay less than the full amount owing to your creditors. If the debts are already a year or more old, they may be willing to accept less than the full amount owing. A debt settlement is most successful if you can offer the settlement as a lump sum of money.
Debt management plan. A credit counsellor will contact your creditors and work out a plan where you repay the debts in full, but generally at a reduced or zero interest rate. A debt management plan works well if you can afford to repay your debts in full, but need a break on the interest.
Consumer proposal. If you can’t afford to repay your debts in full, a consumer proposal is another option. In a In a consumer proposal your consumer proposal administrator negotiates a payment plan where you pay back a portion of your debts, generally between one third and one half of what you owe. This allows you to get relief from your debts, but avoid bankruptcy
If you’re looking for a credit counsellor in Toronto, get a quick assessment with us today or call us at 416.900.2324. We will help you develop a plan, reduce your interest costs and get out of debt over time.