Are you insolvent?
Debt is one thing that all people I meet with have in common. Obviously. The extent of that debt may be more than it is for others. Some people may feel like they are drowning in debt, but are actually not insolvent. They have the means to dig themselves out of debt on their own with some budgeting help and some patience. While others who are struggling to stay afloat actually don’t have the means to dig themselves out of debt on their own and need to take a big step in order to get out of debt. That step may be a consumer proposal or maybe even bankruptcy.
In order to be able to make a consumer proposal or file bankruptcy, you must be insolvent.
So what exactly does insolvency mean. There are two possible definitions for insolvency:
- the value of your total debts outweighs the value of your total assets
- you're unable to pay your debts as they become due because of poor income or cash flow
Many people aren’t sure if they are insolvent or not. An easy way to determine this is to look at your current debt repayment plan. If that plan is making your cash flow negative, even after cutting back on expenses, there is a good chance you are insolvent. If you have determined that you’re insolvent, there is no point in wasting any time seeking outside help. At the rate you are going, you are simply digging yourself into a deeper hole.
If you think you may be insolvent, or if you are unsure of where you stand, contact us today for a free, no-obligation consultation. We will review your unique situation and come up with the best solution to meet your needs. That may mean making a consumer proposal or filing personal bankruptcy. Although the idea of having to go that route may seem scary, it’s important to remember that getting a handle on your debt now will be better for you in the long-run.