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For Canadians Debts Are High – But You Still Have Alternatives


Canadian household debt levels hit record highs again, raising alarms as to how many more Canadians will soon find themselves unable to pay their debts.  Figures just released by Statistics Canada indicated that the debt-to-income ratio for Canadian households increased to 163.4% in the second quarter of 2012. Debt levels of this magnitude are of deep concern. Canadians households are stretched thin already, and heavy debt burdens are putting more Canadians at risk of financial default in the event of interest rates increases, unemployment or other economic hardships.

If you are one of the many Canadians with high debt, whether you are barely making ends meet or are already getting calls from collection agencies, you have alternatives. Creating a personal budget and contacting your creditors to negotiate some relief can be a first step. Seeking help from a credit counsellor, entering into a debt management plan, negotiating with your creditors via a consumer proposal, or filing for bankruptcy in Canada are also possible options.  The trick is to take immediate steps to reduce your debt. Start by assessing your situation and come up with a plan to deal with your debts as soon as possible.

Start by making a list of your debts.  How much do you own and to whom? If you think you can pay your debts off on your own over time start by making a personal budget. Review all of  your income and expenses and see where you have room for improvements.  Divide your expenses into three categories:  needs, wants and desires. Needs are obviously things like food, shelter, necessary clothing etc.  Wants are thinks that are options, but which you can likely afford — things like your cell phone, your cable bills, eating out. Can you find ways to cut back on the cost of some of these items?  Look long and hard at the desires category — trips, luxury items, that new pair of designer shoes. Do you really have to have these or are you being pressured by today’s advertising? Would you be better off postponing these purchases to the future or looking for alternatives — perhaps the second hand store?  Once you have a list of your debts, start reducing those debts step by step.

If you are unable to reduce your debt on your own, seeking professional help is your next step. In Canada, you can talk to a trustee in bankruptcy who will not only explain how to file bankruptcy in Canada but will explain all of your debt relief alternatives.


Posted by Editor Bankruptcy Alternatives @ 8:32 pm

How to File Personal Bankruptcy in Canada


The how to file personal bankruptcy in Canada process involves these steps:

First, you decide that you need help.  You may be able to deal with your debts on your own, or through a debt consolidation loan.

Second, you meet with a licensed bankruptcy trustee to review your options, which may also include filing a consumer proposal as an alternative to bankruptcy in Canada (in the U.S. you would need to consider a Chapter 13 Wage Earner Plan).

Your trustee will gather all required information, and then prepare your bankruptcy documents, and then you meet to sign the paperwork.  Your trustee will electronically file the documents with the Office of the Superintendent of Bankruptcy, and you are now officially bankrupt.

During the bankruptcy you are required to complete your bankruptcy duties, and your trustee will calculate your surplus income payments.

Once you have completed all duties, you will receive your bankruptcy discharge.  You can now begin the process of repairing your credit after bankruptcy in Canada.



Posted by Editor Bankruptcy Alternatives @ 2:55 am

How To File Bankruptcy in Canada


Before you decide to file bankruptcy in Canada, review your options.  Perhaps bankruptcy isn’t necessary.  You have other choices, such as:

Only if all of these other bankruptcy alternatives are not possible should you consider filing bankruptcy in Canada.  Here are the steps required:

  1. The first step is deciding you need help with your money problems;
  2. Arrange for a free initial consultation with a bankruptcy Canada trustee;
  3. After making your decision, the trustee will prepare the bankruptcy paperwork, and you sign the bankruptcy documents;
  4. You then perform your duties;
  5. Get your bankruptcy discharge, which eliminates your debts.

It is important that you understand the steps involved, and research your options, because only you can decide whether or not bankruptcy in Canada is the correct option for you.

Posted by Editor Bankruptcy Alternatives @ 9:14 pm

Debt Consolidation Loan Calculator


For most people with debt problems, the first alternative to bankruptcy they consider is a debt consolidation loan.  That makes sense, because with a debt consolidation loan you can pay off all of your debts and only have to worry about one loan payment each month.  In most cases your new loan will have a lower interest rate than what you were paying on all of your high interest credit cards, so you save money.

But do you qualify for a loan?  That will depend on a number of factors, including your income, and the amount of your debt.  To find out if you qualify, use a debt consolidation loan calculator to calculate your loan payments.  You enter the amount you owe now, and the interest rate you are paying, and you enter the amount you will be borrowing, and the new interest rate you hope to get, and you can instantly see how much you will save.

It pays to be prepared before you go to the bank, because if you won’t qualify you need to take steps to increase your chances of qualifying for a loan.  You may need to pay off one or more of your credit cards first, or take steps to increase your income.

Either way, you want to know whether or not you can afford the loan before you apply, and that’s why it’s essential that you use a debt consolidation loan calculator to calculate your payments first.

Posted by Editor Bankruptcy Alternatives @ 12:48 pm

Should Bankruptcy Be Your Last Option?


People sometimes go through extreme economic turmoil. They find themselves surrounded with huge amount of debts and fail to handle the outstanding amounts. During such a financial upheaval, most people take up bankruptcy as the best option to get release from their debt afflictions. This helps them to start with fresh endeavour to restore a sound financial condition.

Filing bankruptcy is a very complicated process. There are certain new laws which has made filing bankruptcy even more intricate. According to the new law, filing for chapter 7 bankruptcy is only possible if you have no monthly income. When you file for chapter 7 bankruptcy, the court seizes some of your assets in order to sell it and pay back your debts. These seized assets are called non-exempt property. The rest of the property which you are left with you are called exempt property.

If you have a minimum amount of income, then you are not eligible for the chapter 7 bankruptcy. Instead you will have to file it under the chapter 13. In chapter13, you will not be required to surrender your property to the court to repay your debts. The reason is that, chapter 13 offers a repayment plan suggesting how to repay your debts to your creditors easily. You can utilize your monthly income and other monetary resources to pay off your debts.

Filing for bankruptcy seems to be the easiest way to get relief from debt clutches. Nevertheless, there are certain drawbacks that you can experience after filing for bankruptcy. It will affect your credit report adversely which will force you into several years of difficulties. Owing to this negative credit remarks you may not receive loans or credit cards further. Hence, filing bankruptcy should be the last option to get relief from prevailing debts.

Alternatives to Bankruptcy

If you want to avoid filing for bankruptcy and yet want to repay your debts, there are some alternatives. You can opt for a debt settlement program. As soon as you enroll with a debt settlement company, they negotiate the debt amount including the interest rate with your creditors on your behalf. You are then only required to pay the reduced amount to the settlement company and they will disburse the amount to your creditors.

Debt consolidation is another way to rule out your debts. When you enroll with a debt settlement company, you get a single loan so as to recompense your all other debts. Both of the above debt relief options will bear a negative influence in your credit report. However, it will be still better than the detrimental and harmful effects of filing bankruptcy.

Posted by Editor Bankruptcy Alternatives @ 2:43 pm

Five Reasons Why Debt Consultants Are A Bad Bankruptcy Alternative


Credit and debt consultants advertise that they can settle your debts for cents on the dollar. It sounds too good to be true, and usually it is. They put you on a monthly plan where you pay hundreds of dollars per month, and they tell you they will use that money to make a debt settlement with your creditors. In many cases a debt settlement or debt management plan is a scam. It sounds good, but here are five reasons why using a debt consultant to deal with your debts is not a good idea:

First, a debt consultant doesn’t work for free. They will take the first few monthly payments you make for their fee. If they take the first 10 monthly payments for their fee, and then take another 10 payments for the settlement offer to the one of your credit cards, it will be 20 months before the first credit card company gets any money. It is not likely that a credit card company will do nothing for 20 months when they are not getting paid. If they are not getting paid, they will continue to call you, and they may take you to court and sue you. That’s not good for you.

Second, debt settlements will not work on all types of debts. The government will not accept a deal to get rid of your tax debt. They want their money, and they don’t make deals, because if they make a deal with you, they will need to make a deal with everybody, and that’s a bad precedent for them to set.

Third, the debt consultant has no way to force all of your creditors to accept the deal. One or two of your credit card companies may agree to a deal, but if the others don’t agree and sue you, the deal will fall apart. You need relief for all of your debts, not just some of them.

Fourth, in many cases the debt consultant is not doing anything that you couldn’t do on your own. Putting money in a bank account for two years, and then sending it to the credit card company, does not take much skill. You can do that on your own.

Fifth, many debt consultants will meet with you, review your situation, charge you a fee, and then refer you to an American bankruptcy attorney, or a Canadian bankruptcy trustee or consumer proposal administrator! They don’t actually do anything for you, other than tell you that you need professional assistance. Start with the professional; don’t pay the consultant first.

You have options, including a debt consolidation loan, a Chapter 13 Wage Earner Plan, and a consumer proposal. You can even file bankruptcy in Canada, or Chapter 7 Bankruptcy in the USA. Consult an expert today and review your options.

Posted by Editor Bankruptcy Alternatives @ 6:23 pm

How will new bankruptcy rules in Canada affect me?


Much has been written about the new bankruptcy rules in the United States that came into force in 2005. Less well known is the fact that new bankruptcy rules in Canada came into force in September, 2009. One of the impacts of the new rules in both Canada and the United States is that personal bankruptcy will cost more for many individuals.

In Canada, the new surplus income rules mean that if you earn over a set amount, you will be paying more while bankrupt, and your bankruptcy will last longer.

If you have good income, but also have high debts, it is important that you explore all bankruptcy alternatives to avoid paying a huge amount while bankrupt.

The two obvious alternatives to bankruptcy are a Chapter 13 Wage Earner Plan (if you live in the United States), or a consumer proposal (if you live in Canada).

There are pros and cons to both options, but in general it’s a good idea to avoid bankruptcy if possible. Consult an expert in the United States or Canada for more information.

Posted by Editor Bankruptcy Alternatives @ 6:28 pm

Bankruptcy Alternatives: An Expert’s Advice


The editors of the Bankruptcy Alternatives Information web site are constantly researching ways to avoid bankruptcy. In the past we have discussed debt consolidation loans, credit counseling, Chapter 13 Wage Earner Plans, and Consumer Proposals.

Today we are pleased to report on a new research report from Dave Clark, a U.S. attorney with many years experience helping people in financial trouble. Here is his story:

I graduated with a BS degree in Economics and a minor in Finance. I worked as bank examiner for several years before going to law school. Once graduating law school with honors in 1984, I accepted a job as an associate in large metropolitan law firm and represented some of the largest and wealthiest corporations in the U.S. But it wasn’t satisfying. No, not at all.

I found my true calling and fell in love with practicing law again. I began working even harder, earning less at first, representing ordinary workaday consumers. I began thinking of large corporations as bloated whales, driven by arrogance and greed, as they systematically rolled over working moms and pops. I fell in love with the possibility of becoming the fastest barracuda in the ocean that could take a bite from whales anytime, anywhere and anyway I wished.

You see, I knew the attorneys representing large corporations. I had been one of them for 5 years. I knew their level of expertise and their tactics. I decided to up the ante and bring the fight to their front door. That was 20 years ago.

Today, there is no better reward for me than bringing in a verdict against arrogant bullies, unethical corporations, and wealthy despots. You and I together will see FOREVER from the top of a pristine mountain. My love for the law and this pure purpose still drive me. I smile often, daily, proudly, and remain more committed than ever before.

My life has purpose. I have destiny. There is nothing I would rather do.

I want to share it with you.

Everyone coping with a financial problem has extraordinary options. Your options are almost unlimited. The best results do require a solution designed with the end game in mind. You may want to compromise in one area to maximize another, to achieve the best overall outcome. With one strategy supported by many complementary tactics, your best results can be virtually guaranteed.

The best way to see your potential end results, in advance, is use a common measure. You may even want to mix and match the most profitable benefits and advantages of the following alternatives:

  • Consumer Credit Counseling – the free course required as a condition of filing bankruptcy (certificate of completion required). They will try to create a monthly budget that pays all of your debts and bills.
  • Debt Management Plans – a low cost service for renegotiating interest rates and penalties owed on unsecured debts.
  • Debt Settlement Plans – a more aggressive service for settling unsecured debts for a percentage of the principal due, with payment spread out over several years.
  • Debt Consolidation Loans – new loans requiring new approval to combine debts (Many dangers here).
  • Home Equity Loans – new loans using your home as collateral to pay off other debts (Many dangers here).
  • Chapter 7 – the complete discharge of most debts without payment of any kind. You can eliminate judgments, debts and contractual liability easily.
  • Chapter 13 – the discharge of most debts after making partial payment over 3 to 5 years.
  • Chapter 11 – both discharge and reorganization of debts in a plan of 5 years or more.
  • Private Debt Negotiation – The individual settlement of debts yourself or with the assistance of an attorney.
  • Litigation of Select Debts – Invalidating or settling debts through the legal system (without filing), with rights of discovery, deposition and jury trial to resolve disputes.

In my Bankruptcy Strategies manual, I explain the advantages and disadvantages of each of these alternatives. In some cases, using 4 or 5 of these alternatives creatively will maximize your end result. I have included a series of worksheets and instructions intentionally designed to help you find your ultimate solution.

You will see, in dollars and cents, how each of these alternatives could help you. You will complete worksheets in the privacy of your home to reveal your best option and potential savings. No more guessing. No more excuses. You will know how each option will change your life.

You will create a side by side comparison of your expected results over 5 years. This should be your common measure when comparing your costs, benefits, advantages and disadvantages. Once you know what to do (using included instructions and examples) completing my worksheets is easy by design.

There is no reason why most people cannot use all of these alternatives as they see fit. We are free to combine options and alternatives to design your beautiful solution.

Timing is Critical

Simply knowing that you have alternatives is not enough. You must use them at the proper time and in the proper sequence. Unfortunately, many people procrastinate with the best intentions. But as time slips away and they lose the ability to keep all of their exempt assets and discharge all debts.

Start early. A few weeks or a few months can make all the difference.

The best time to compare your options is when you first have problems paying your monthly bills. At this point, you may be able to avoid filing altogether, but also maintain all legal rights and benefits if filing later becomes necessary. Safe play. Highly profitable. You keep all property and assets and remain in control.

If creditors and collection agents are calling, you have less time to plan and fewer options. If you need to bankruptcy to stop foreclosure, eviction or repossession, your options are needlessly limited. But you still have many powerful and highly valuable options.

Success using an optimized bankruptcy strategy is not an accident. It takes planning. You must have time to first discover what you want, what makes the most sense for you, and have time to act. Then, your beautiful solution will unfold with uncanny precision and a full discharge of all debts will be quick and easy.

Think of it as a game. First you have an idea and decide on a plan. Then you line up all of the dominoes. Then you file. Then with the slightest flick of a a finger, everything falls in place, at the proper time, in the proper sequence, with automatic precision. Your competition will be dumbfounded. No problems. You were first to act. You win.

It is hard to find reputable information on your bankruptcy alternatives. For a credible review of your options, consult Mr. Clark’s book, Bankruptcy Strategies: Claiming Maximum Benefits Under Chapter 7 & 13. Find Out How The Pros Use Their Options Wisely And Beat Creditors At Their Own Game.

You have options, but only you can take action to deal with your debt.

Posted by Editor Bankruptcy Alternatives @ 2:02 pm

Bankruptcy Toronto: A Case Study in Bankruptcy Alternatives


Are your bankruptcy alternatives different in you live in a big city? That’s an interesting question. To answer it, let’s take a look at one of the largest cities in North America, and discuss bankruptcy Toronto and it’s alternatives.

The advantage of living in a big city is that there tend to be more jobs. It may also be possible to live less expensively, since you may not need a car. In Toronto you can rely on an extensive subway and public transit system. However, your housing costs may be higher, as rent and other expenses may be higher in a city like Toronto.

So, if you live in a big city and you are trying to deal with your debt and you are considering bankruptcy, the first step is to do a detailed review of your monthly budget and see if you can deal with your debts on your own. If you can, you can avoid bankruptcy.

However, if your living expenses are too high to allow you to pay off your debts on your own, a bankruptcy in Toronto may be your only option. Whether you live in a big or small city, start with a budget to review your options.

Posted by Editor Bankruptcy Alternatives @ 12:21 am

Bankruptcy Alternatives During an Economic Crisis


The “credit crunch” of 2008 has lead to more government bailouts and a deeper recession in 2009; many experts are now even predicting a depression. What impact does this have on your bankruptcy alternatives?


If your home equity continues to increase, and if you are getting lots of hours at work, you probably qualify for a debt consolidation loan. However, during a recession when your house is declining in value and foreclosures are on the rise, and when your income is going down, a debt consolidation loan is probably neither affordable or something you can qualify for until the economy bounces back.

If you have a good job and good income, Americans could file a Chapter 13 Wage Earner Plan, and Canadians could file a consumer proposal. Under these legal arrangements you repay a portion of your debts, and avoid having to file bankruptcy. However, to repay a portion of your debts you need an income, and if you are unemployed or working reduced hours, you may not have the income to do a Chapter 13 filing or a consumer proposal.

In other words, the recession has made it more difficult to take advantage of the bankruptcy alternatives that worked so well in the past.

What can you do? Cut your expenses, make a budget, find a part time job, sell any assets you have to raise cash, and ride out the storm. The economy will eventually improve; the trick is to keep your head above water long enough to allow you to benefit when the better times return.

Posted by Editor Bankruptcy Alternatives @ 11:52 pm is a free resource
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