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What Do You Do When You’re in Serious Debt?

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Debt free

Anyone can end up
in a bad financial situation, it’s not a measure of character or a marker of
success to experience money troubles. One topic that doesn’t get discussed very
openly in public is bankruptcy and it’s understandable why: it’s a scary word
with scary-seeming consequences.

Debt free

The public
discourse around bankruptcy is filled with nightmarish tales of businesses
going completely under and even huge celebrities falling from grace. This is
far from the realities of bankruptcy. Today, a larger number of Canadians are
growing closer and closer to large debts to the point where living in debt is
accepted as the norm.

So how do you know what’s the best thing to do? With the help of a licensed insolvency trustee, you can learn if a consumer proposal is better than bankruptcy when planning your path to financial stability. Not entirely sure what a consumer proposal is? Unsure of the realities of declaring bankruptcy? Read on.

Spot the Signs

There are some telltale
signs of financial problems that you can catch before you find yourself even
worse for wear. Do any of the following sound familiar to you?

  • You
    only make minimum payments on your credit cards
  • Bill collectors
    and collections agencies call you regularly
  • Dealing
    with your finances causes you extreme anxiety
  • You
    pay for necessities with credit cards
  • You
    don’t even know the full extent of your debt
  • You
    hide your financial reality from your loved ones

The solution for you could be filing for bankruptcy or a consumer debt proposal. Since both those avenues fall under the Bankruptcy and Insolvency Act, they can only be done by a licensed bankruptcy trustee like the ones at David Sklar & Associates.

Both consumer proposals and bankruptcy:

  • Offer relief to the debtors
  • Stop collection efforts and legal actions (like wage
    garnishment)
  • Release the debtor from their debt load
  • Offer training to avoid future debt problems

A bankruptcy trustee can walk you through the differences between the
two processes so you can make an informed decision about how to proceed with
debt relief.

Consumer Proposal vs
Bankruptcy

When you file a consumer proposal, you are usually allowed to keep all of your assets including homes and cars. You are obligated to continue making secured loan payments for those assets. In the case of bankruptcy, the debtor is allowed to keep some assets though they are usually required to release major assets during the process.

Sometimes an individual is eligible to file for bankruptcy but they work in a profession that doesn’t allow it. Some individuals won’t accept the negative associations with bankruptcy, some don’t want to relinquish certain assets, or they don’t want their bankruptcy to unwillingly lead a spouse into bankruptcy, too.

In those situations, a consumer proposal may be the best course of
action. You can only find out what’s best from a knowledgeable bankruptcy
trustee so call today.

David Author
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