If you are currently facing financial difficulty and bankruptcy, there are a number of options available to you. You should explore all possible solutions before you make any decisions.
Alternatives to Bankruptcy
Debt Consolidation Loan
Debt consolidation gathers your debts into a single loan so that you can repay multiple creditors through one monthly payment. The interest rate is often lower than what your existing creditors offer.
If you choose to participate in a debt consolidation loan your financial institution will pay your creditors and in exchange, the financial institution will offer you a new loan with a single monthly payment at a potentially lower interest rate.
Your eligibility depends on your overall credit rating and the total amount of your debt.
If you do not think you will be able to qualify for a debt consolidation loan, you may want to consider a Consumer Proposal since it has the same effect of grouping all your creditors into making one monthly payment.
Informal Debt Settlement
Depending on the amount of your debt, it may be possible for you to contact your creditors directly and negotiate a lower interest rate or a repayment schedule that works for you. With informal debt settlement, creditors expect you to present them with a plan outlining how you can pay them back; there are many variables and potential challenges to consider.
In situations where your debt is low but repayment is becoming unmanageable help from a credit counseling agency may be an option. Non-profit credit counseling organizations contact creditors on your behalf. They also provide education and counseling on personal budgeting strategies and how to avoid debt.