Whether you are barely holding on or the debt collectors have already come knocking, the best strategy is to take stock of the situation and come up with a plan as soon as possible. Everyone has the same basic options when it comes to dealing with your debt.
1. Deal with creditors directly
Check your credit report to make sure the debt is yours. Then try to negotiate with your creditors and then make a plan to pay off your debt.
This is a good option if:
You are insolvent
You CAN afford monthly payments
Your balances are reducing over time
You have assets that if sold will cover the entire amount owed
2. Make a consumer proposal to creditors
Making a consumer proposal will stop creditor action, stop interest and protect your assets. Payments are fixed (not based on income), so they may not work with your budget.
This is a good option if:
You are insolvent
You have previously filed bankruptcy
You own assets and property
You have a high income
Bankruptcy will affect employment
3. File bankruptcy
Filing bankruptcy will end your legal obligation to pay your creditors, stopping all creditor action. No voting or approval is required (as is with a consumer proposal).
This is a good option if:
You have no prior bankruptcies
You can’t afford to make current payments
You have low or inconsistent income as payments are based on your income
You have little or no non-exempt assets
If you are in debt and considering one of these options, contact us today for a free no-obligation consultation.
