For many, bankruptcy in Canada is a very scary and often misunderstood legal procedure. It is definitely intimidating to those that have no clear idea on what to expect and how long the procedure will last. It is important to become educated as much as possible before even beginning the bankruptcy process. Thankfully there are resources you can turn to for help and guidance.
Every country has differing requirements for bankruptcy and getting debts back in line. In Canada there are numerous options. One of the first options to consider is a debt management plan through a not for profit credit counsellor. A debt management plan does not erase debts. Instead it helps individuals bogged down with too many payments get those payments back under control. It helps establish flat rates to pay each month, sometimes substantially less than the original payments, so that debtors can pay off the debt and still maintain credit. In most cases you repay the debts in full, but at a reduced interest rate.
If you can’t afford a debt settlement, a consumer proposal is another option for dealing with your debts, where you offer to repay a portion of the amount owing. Why would a creditor accept a consumer proposal? Because they expect to receive more in a proposal than in a bankruptcy.
If those options are not practical, a bankruptcy may be your only option, but we suggest you review all options before making a decision.