When surrounded by financial problems, it is hard to find the light at the end of the tunnel. There is one, though, and it surprisingly is not declaring bankruptcy. In fact, that is the last resort. Here is how you can avoid bankruptcy:
Check your income
Maybe if you cut expenses or get a second job, you can have more money to pay your debts. That is the best option if your debts are small and if you are able to make the payments on time.
Creditors may agree to accept less than the full amount owed when the debts are a year or more old. If you can offer a good amount of money for your creditors, you may propose a debt settlement.
If you have an acceptable credit history or another alternative to secure the loan, you can consider getting a debt consolidation loan. Keep in mind that this option only works if you can lower your interest rates while still being able to pay your debts over the course of a few years.
When you have a stable source of income, but still find impossible to afford to pay the debts in full, a consumer proposal is a great option. You can pay less than you owe by negotiating a monthly payment plan with a consumer proposal administrator over 3 to 5 years.
In this option, the credit counsellor can negotiate a plan where you can pay the debts to the creditors. In the end, the debt will be paid in full, but at a reduced or zero interest rate.
You should only consider bankruptcy after realizing none of this options work. But before taking any actions, contact an experienced credit counselling company for an appointment. Goodbye Problems can offer the best alternatives in credit counselling in Alberta and Mississauga, so that you can find debt relief without declaring bankruptcy.