How to Get Out of Debt while avoiding Bankruptcy

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Financial issues are one of the most difficult things for adults to deal with. It can result in sleepless nights, relationships issues, and constant worry. Perhaps you have considered bankruptcy as an option, which is very viable.
If you have not already tried it, consider some financial strategies that may be able to help you break the cycle of debt and still avoid a bankruptcy proceeding. None of it is easy, but with commitment and good counselling from a Trustee in bakruptcy in Waterloo, many have achieved these goals.

What you can do to get out of debt while avoiding bankruptcy.

Sell an asset.

It is tempting to keep your lovely home, but it may be more advantageous to sell during a housing upswing and get a reasonable price for your house. With the proceeds, you can pay off or down some other debt.
By relocating to a smaller place with monthly payments far lower than your mortgage, you could be back on track to reduce or eliminate some of your current debt.

Reduce expenses.

Start with a spreadsheet of everything you are spending now. Look at all the entries critically. Total what you are paying per week for fancy coffee or entertainment like drinks with the gang or movie night. These are all places that can be cut. Explain to your family and friends that you are on an austerity program, and when things are back on track, you will rejoin them.

Increase income.

Take on a second job. Most employers will not object to your moonlighting as long as your second job does not interfere with your primary responsibilities and that you do not share technology or corporate information, especially with a competitor. In today’s electronic world, there are many opportunities to work at night and on weekends at home without the need to pay a babysitter.
If you have an extra skill like a second or third language, you can find many sources to increase your income.

Negotiate.

Talk to your credit card company about a reduced interest rate or find another card service where you can consolidate all your other cards into a single one with a 0% rate for a specified period of time, usually a year or 18 months. This will allow you to make the same payments but reduce the overall debt sooner.

If you have done all of this but still find yourself hopelessly behind, before striking out with bankruptcy, consider these:

• Borrow from family or friends
• Get a debt consolidation loan or a second mortgage
• Make a settlement offer to some or all of your creditors
• File a consumer proposal

Some of these options will depend on your relationships with family and friends or current credit numbers. Credit counselling through a Waterloo bankruptcy trustee or insolvency trustee can be an option. Working through a credit counsellor will involve a fee, so be sure to consider that as you work through the financial benefits and disadvantages.

In Canada, a consumer proposal is an arrangement through a Licensed Insolvency Trustee. This is a contract where you are bound to repay specific amounts within a designated period of time.

The best decision you can make is to consult with a professional. They will be able to discuss all of the implications of your debt reduction choice and make recommendations about how you should proceed.
The ultimate decision is yours but simply laying all your financials and seeing the numbers objectively will help you decide on the best course of action, even if that includes bankruptcy.

Dana MacRae Licensed Insolvency Trustee has been helping people manage their debt since 2000. With 10 offices across Southwestern Ontario, it’s easy to schedule an appointment. Just go to www.danatrustee.ca and book your appointment online. We offer video conferencing, or book a home consultation and have the trustee come to you (when allowed by COVID-19 protocols). Contact us today at 1.800.665.9965 or info@danatrustee.ca to learn more about our services and find the financial solution that’s right for you.