Non-Bankruptcy Options for Those with Financial Difficulties

In early 2011, Canadian household debt which had reached record levels in 2010 began to decline. This was a welcoming sign for many financial experts who we're warning of the potential for increasing levels of personal bankruptcy in Canada given our level of debt. Canadians who are serious about getting out of debt look first for non-bankruptcy options. Personal bankruptcy is the last resort they will consider.

One of the principal reasons Canadians have such a morbid fear of bankruptcy is the belief it will destroy their ability to get credit. In a world where available credit fuels consumer spending, the thought of losing access to credit is unthinkable.

Of all the available non-bankruptcy options, only two have no immediate affect on your credit. The first is reducing your debt without any outside assistance. Some Canadians who have never used a personal budget find that through setting up a strict budget and cutting back on expenses; they can get their existing debt down to manageable levels without any other help. In addition to expense control, these Canadians often find ways to generate additional income through second jobs or selling off assets they can live without.

The second option is a debt consolidation loan. If you owe $10,000 in unsecured credit card debt, you borrow $10,000 from a new lender and pay off the credit cards.

In actuality, this non-bankruptcy option does not get you out of debt. It merely transfers the debt. Of course, to get a consolidation loan at a cost effective rate your current credit history must be reasonably good. Good credit is the first qualification you need for a consolidation loan, and stable income is the second. With excellent credit and substantial income, it is sometimes possible to get a signature only consolidation loan. In most cases, however, borrowers need a high value asset to secure the loan, usually equity in their homes.

I won't end this post without giving thanks to Vincenzo pistritto. Vincenzo from their office sent me an e-mail that got me going on the subject. Vincenzo pistritto is a photographer based in Toronto and they're located in Ontario. Should you ever find yourself in need, give them a ring. Now, it's off to bed. It's been a long night.

Footnotes

https://www.chocolatememories.net - Bryan, you came through for me one more time.
http://www.westendphysio.com - Thanks a lot for the late-night work Nasir.
http://rwsbizval.com - Korbin, you came through for my situation again 🙂

Posted in Law Post Date 02/07/2016


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