It can be very easy to get into debt and very hard to get out from under it. Most people have a general idea of what bankruptcy can do and how it works but rarely do they think through the consequences of taking such action. There are numerous alternative debt solutions in New Brunswick, let’s look at a few.
- Sell personal assets: Selling your assets may give you sufficient cash to pay off your debts and protect your credit rating. If you are open and honest with creditors and you make an effort to pay off your debts they will usually give you time.
There is downside to selling your assets of course; number one, you probably need them to live and secondly, you will not get full value for them when they are sold.
Think hard and long before you take this route, often it is little more than a quick fix.
- A consolidation loan: taking out a consolidation loan will allow you to avoid bankruptcy and will have a positive impact on your credit rating. Often the loan can be structured so the repayment terms are more manageable than dealing with individual debt payments, the interest rate on the consolidation loan should be less than the interest rate you are currently paying, especially if the debts are against a credit card.
A consolidation loan can be a good alternative debt solution but you must be able to manage the payments, if the accumulated debt is too high, this might prove unworkable.
- Consumer proposal: A consumer proposal is one of the debt solutions in New Brunswick that is made through a trustee. The Bankruptcy and Insolvency Act includes a provision that is available to debtors that do not want to declare bankruptcy, it allows debtors to plead for new terms to repay the debt. The proposal is binding on all creditors if the majority agree to the proposal.
If the creditors are not satisfied and reject the proposal you are right back where you started. Although nothing long term was accomplished, filing the proposal puts a stay on any collection proceedings, during this time no creditors can institute collection proceedings.
Not all debts can be factored into the proposal; alimony and maintenance are two of them.
A bankruptcy trustee plays a pivotal role in most alternative debt solutions in New Brunswick and can be instrumental in helping you restructure your debt without further degrading your credit rating.
There are numerous approaches to alternative debt solutions in New Brunswick. The professionals at Powell Associates Ltd can help clients find the best way to develop a lasting solution to excessive debt.
