Earthblog

Bankruptcy isn’t the right thing for everyone. Many people can save their home ownership and other assets by taking another route.

Take a look at these alternatives. And remember – the sooner you act, the better your chances are to avoid bankruptcy.

Contact your creditors
We recommend that you explain to them why you can not make your payments and suggest a new arrangement that could work for both of you.

You may be surprised how many creditors are willing to co-operate.

Debt consolidation loan
You can approach a bank or lender and get all your debts combined into one loan. Instead of having a lot of small, high-interest loans, you will have only one debt to one lender.

Putting together an informal Proposal
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 avoid bankruptcy altogether. If this is possible, it preserves your credit rating.

Informal Proposals are similar to debt consolidation loans, except that you do not borrow any more money.

Filing an official Proposal
Under the Bankruptcy and Insolvency Act, your Trustee can file an official Proposal. This is an arrangement that lets you pay off only part of your debt and reschedule the payments. The creditors will accept the Proposal if it means they will be better off than if you declare bankruptcy.

There are two types of Proposals: ‘Consumer Proposals’ for individuals with debts up to $250,000 and ‘Division 1 Proposals’ for corporations and individuals who owe more than $250,000. Consumer Proposals are the most common type. Alison will explain how they work, what they do for you, and help you develop and file your Proposal.