Considering bankruptcy? Consider this instead

It’s a situation that many people know all too well. Rising credit card debt, insurmountable interest on student loans, monthly mortgage and car payments, all with the never-ending cost of basic necessities such as food and clothing. And, if these financial stressors are compounded by a layoff at work or an injury at home, it can seem like the bills will never stop coming. With no idea what else to do, and with bank accounts quickly depleting, many people decide simply to declare bankruptcy. Bankruptcy wreaks havoc on people’s lives, both in the present through the loss of assets such as homes, but also in the future through severe damage to credit score. But, before you decide to pull the trigger on bankruptcy, you should know that there are other options available to you. 
Considering bankruptcy
Increasingly, many Canadians who otherwise might have declared bankruptcy are filing consumer proposals instead. A consumer proposal does not eliminate your debt, but rather is a settlement or compromise with your creditors. The conditions and terms of consumer proposals vary from person to person, as they arranged between the debtor and the creditor(s). In all cases, though, a consumer proposal is a compromise between the amount of money actually owed and the amount of money that the creditors would receive if the debtor declared bankruptcy. This means that your creditors win by getting more money than they would have gotten if you declared bankruptcy. And, you win by reducing the amount of money that you owe to your creditors. Keep in mind that you will still have to pay back the amount that you agree to with your creditors, The new debt must be paid on a previously agreed-upon schedule, with regular payments and a set final due date. In most parts of Canada, the agreed-upon amount must be paid within no more than five years. 
The biggest benefit of a consumer proposal over a bankruptcy declaration is that you are able to keep your assets, such as your home or your vehicles. Because you will not have declared bankruptcy, but instead reached an agreement with your creditors, your assets cannot be seized. But, just as with a bankruptcy declaration, the stressful and irritating calls from your creditors will be eliminated, and you will be well on your way to resolving your debt
If a consumer proposal sounds like it might be the right option for you, it’s best to hire legal help to act as an intermediary between yourself and your creditors. This will ensure that you receive the best possible compromise with your creditors, and that the terms of the agreement allow you to continue living your life while also resolving your debt.
If your financial situation seems like too much for you to handle, bankruptcy isn’t your only option. Visit for more information on consumer proposals, and to find out if a consumer proposal is the best solution for your financial situation.

Denny Jones

Hello, I'm Denny Jones, the voice and mind behind this personal finance blog. With a passion for helping others achieve financial independence, I started this blog to share my insights, experiences, and strategies in managing money. Whether you're just starting out on your financial journey or looking for advanced tips to optimize your wealth, my goal is to provide practical and actionable advice that anyone can follow.

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