Most of the people who call my office in Cambridge at 519-622-3773 (or 310-PLAN) don’t want to go bankrupt. They are having financial problems, and they want to understand all of their bankruptcy alternatives. I believe that bankruptcy is the last option, so I always explain your other options.
First, you can deal with your debts on your own. You can reduce your expenses to free up cash to use to repay your debts, or perhaps work more overtime or get a second job to increase your income.
Second, a debt consolidation loan may help reduce your monthly payments. If you can borrow at 8% interest to repay your 18% interest credit cards you can devote more each month to the principal, which gets you out of debt faster. Unfortunately this option only works if your credit is good enough to get a loan.
Your third option is credit counselling, also called a debt management plan, which is a repayment arrangement offered by non-profit credit counsellors. In Cambridge, Ontario the only not-for-profit credit counselling service is Catholic Family Counselling Centre. They are based in Kitchener, but have office hours in Cambridge, Ontario once per week. Catholic Family Counselling will take all of your credit card and unsecured bank loan debt and negotiate a repayment plan where you pay your debts in full, but with no further interest in most cases.
If you can’t afford to repay your debts in full, the next option is a consumer proposal. In a consumer proposal we work with you to determine what you can afford to pay each month, and then contact your creditors to work out a payment plan where you make one payment each month to deal with all of your debts (excluding mortgages and secured debts).
If you can’t afford the payments in a consumer proposal, the final option may be bankruptcy in Cambridge.
Which option is right for you? It depends on your income, your family situation, and what assets you own. I suggest you fill out our on-line bankruptcy evaluation form, or give my office a call at 519-622-3773 to arrange a free consultation with me. I’ll help you analyze your options, and work out a plan that’s right for you.
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