If you are having difficulty paying down your debt, you may feel like debt relief is impossible. That’s understandable. Having a lot of debt is very stressful and getting out from these high levels of debt is often difficult. However, there are options. Dealing with creditors, handling harassing calls from collection agencies and trying to pay down debt can be exhausting and even lead to depression and other illnesses, it’s important to realize that getting out of debt is possible. One way to understand your options is to meet with a licensed insolvency trustee. Many people believe that bankruptcy trustees are only available to help people file for bankruptcy.
This is not true. A bankruptcy trustee is a person who has been licensed and registered by the federal government. They are able to administer proposal and bankruptcy processes, but they are also able to review financial situations and inform you of the possible options available. If you are having difficulty finding debt relief, this consultation can be very helpful. Most trustees offer the initial consultation at no charge. In this consultation, the trustee will look at your finances and let you know which debt relief options are available.
The trustee will provide you with details on all possible options, not just the ones that he or she is able to help you with. Trustees are bound by a strict code of ethics and are required by law to do so. Having more information allows you to understand all of the available options before you make a decision. The decision is always yours. A trustee will not push you to make a specific choice but, instead, he or she will give you all of the information you need so that you can make an informed decision for your financial future.
Debt Relief Options
Each financial situation is different. This means that different options work better for different people. There is no single “one size solution” that works for everyone all of the time. However, two options that your trustee may mention are a consumer proposal and filing for bankruptcy. These are both legal processes that are administered by a trustee. In a consumer proposal, you make a formal offer to your unsecured creditors to repay your debt on terms that you can afford. In most proposals, you offer to pay a portion of the amount you owe in monthly payments over a specific period of time.
Proposals can be completed in between one and five years. Once you have made all of your payments and your proposal is completed, any remaining outstanding debt is forgiven. If you decide to proceed with a consumer proposal, your trustee will determine what a fair offer to your creditors will be. This offer will then be sent to all unsecured creditors. If the majority of these creditors vote to accept your offer, then all are bound by its terms.
A consumer proposal is a debt relief option that is often considered by many people. It allows you to repay as much of your debt as you can afford without having to pay the full amount. In addition, a consumer proposal does not usually involve giving up any assets or having to make surplus income payments. You pay the amount that has been agreed to and this amount does not change, even if your income increases. In fact, you can even pay your proposal earlier if this is possible for you. Another debt relief option, one that is usually the final one chosen after all other options have been considered, is filing for personal bankruptcy.
The bankruptcy process is designed to give “honest yet unfortunate” debtors the opportunity to eliminate most (if not all) of their debts and start fresh. Much like with a consumer proposal, when you file for bankruptcy, you can include only unsecured debts such as credit cards, personal loans and unsecured lines of credit. Mortgages and automobile loans cannot be included. In addition, alimony payments, child support payments, court-ordered fines and some other debts cannot be included in a bankruptcy or a consumer proposal. Student loans may only be included if you have been out of school for more than seven years. When it comes to finding debt relief, it makes sense to meet with a financial professional such as an insolvency trustee and discuss your options. When you understand more about the available debt relief options, you are able to make an informed choice for yourself.