How to Get Out of Debt: Filing Bankruptcy & Bankruptcy Alternatives
You are not alone if you cannot pay your bills.
Almost every person in Manitoba reaches this point at least once during their lives.
Like many other Canadians bills can get ahead of you.
If you are not careful you could end up using a low interest credit card to pay off higher interest debt and to make ends meet.
Often people feel they have their debt under control and then one day you realize that you need help figuring out how to get out of debt.
Your options to get out of debt in Manitoba
The simple fact is there are several good options available to you.
These options have been used by other Canadians from every walk of life because they work.
Here are the options explained further:
If you are struggling with debt and are worried about your money problems, but your debt could be reigned in with some assistance, you could consider:
Learn money management skills
Learn to create a realistic budget and live within it.
List all of your monthly income and expenses.
Analyze your spending to see what you spend the most money on and see if you can cut down on unnecessary spending.
See if you could increase your income.
Use the extra cash for debt repayment only and not for fun.
It is important that you avoid impulse spending.
Realize that what you are buying is a “want” and not a “need”.
Budgeting and careful money management can help you rebuild your credit rating.
Having access to necessary credit easily and at lower interest rates could save you thousands of dollars.
Debt Consolidation Loan
If you have a good credit score you could consider replacing your unsecured debts with a single debt consolidation loan.
A debt consolidation loan allows you to consolidate all of your high interest debt into one single, low interest low.
Most people consolidate high-interest credit card debt, so the lower interest costs will help you get your debts under control.
Make a Debt Management Plan
Certain credit counsellors can help you construct a debt management plan.
The counsellor will help you negotiate with your creditors to set up a sensible debt management plan.
A structured debt management plan can last for up to 4 years and often lowers your interest charges.
Use the Orderly Payment of Debts Program (only available in Manitoba, Saskatchewan, Prince Edward Island, and Nova Scotia)
The Orderly Payment of Debts program is a program intended to provide creditor protection, financial skills such as budgeting and a low interest payment for Canadians in debt.
If you have already explored such options and can’t pay all of your debts, our Licensed Insolvency Trustees can explain Consumer Proposals and Bankruptcy
Consumer Proposals – Negotiate a Payment Agreement With Your Creditors
A consumer proposal can be made to your creditors by a Licensed Insolvency Trustee.
During the proposal plan, which lasts for up to 5 years, you will make 1 payment to your Trustee.
The Trustee will distribute the funds to your creditors.
The payment will be based on what you can afford to pay and the amount of debt you owe.
Most debtors pay only 30% of their total unsecured debt back.
A consumer proposal is a great bankruptcy alternative if you can’t handle all your debts but have a good, stable income source.
As soon as you have filed the proposal with your creditors, your unsecured creditors are prevented from contacting you, garnisheeing your wages, or taking legal action.
Your unsecured creditors have 45 days to vote to accept or reject your proposal.
Over 99% of proposals made through a Bankruptcy Manitoba trustee are accepted.
Once your proposal has been accepted, it is legally binding to all of your creditors.
Consumer proposals are advantageous because you pay less than you owe with no further interest charges.
You get to keep your home and other assets.
Consumer proposals are attractive to your creditors because they will get paid more than if you were to file for bankruptcy.
Get a Fresh Start By Filing for Bankruptcy
Personal bankruptcy in Manitoba is often the final option.
Bankruptcy is intended to give Canadians a fresh start.
If you cannot pay enough to make an attractive consumer proposal to your creditors you can file for bankruptcy.
You must work with a Licensed Insolvency Trustee to file for bankruptcy or make a consumer proposal.
A Word of Advice – Don’t Stop Paying On Your Debts
You might fear answering the phone, getting bills in the mail or having your wages garnished.
It might feel you can carry on without paying.
Our advice is to avoid doing this.
Deal with your debt problems head on.
It will only get worse the longer you wait.
It can be difficult to face reality but often we hear that people’s only regret is they did not contact us sooner.
The best way to make things better is to act now.
Free Consultation With a Licensed Insolvency Trustee
You are not alone if debt is overwhelming you.
If you need some help sorting out your options to get out of debt we encourage you to contact a Licensed Insolvency Trustee.
These local bankruptcy experts can provide a full range of debt solutions.
The initial consultation is free and the Trustee will help you choose the right option for you and your situation.