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There are other financial options to consider before filing bankruptcy.
Deloitte's reputable and experienced bankruptcy trustees have the knowledge needed to help you explore all possibilities. Some of the options include:
- Improved money management skills: Sometimes the financial damage can be restored by simply repaying the debt over time by improved money management skills. Depending on your province, there may be non-profit agencies that can assist you in developing your money management or budgeting skills. We recommend that you seek out reputable, accredited credit counselling agencies.
- Debt consolidation: A loan combining all your debts into one lower payment. Learn more...
- Informal proposal: If you are able to negotiate a lump-sum settlement or other terms acceptable to your creditors then you may not need a bankruptcy or a proposal, We may be able to assist you with this or you may need to seek another professional's advice; this may be viable with small number of creditors. Learn more...
- Orderly payment of debts: Allows you to consolidate debt. Only available in Alberta, Saskatchewan, Nova Scotia, and Prince Edward Island. Learn more...
- Debt management plan: In certain provinces, non-profit debt counsellor offer a service called a debt management plan. A debt management plan is a repayment plan that repays the entire debt principal due. However, not all creditors will participate in these plans. Learn more...
- Private debt counselling: Beware of debt counselors in the marketplace that are not accredited and not regulated by the government or other authorities. Many of these companies will charge a large consultation fee when the only viable option is a consumer proposal or bankruptcy. Learn more...
Please note that only a licensed bankruptcy trustee can administer a consumer proposal or a bankruptcy. In addition, if we believe that there is another type of professional better suited to assist you with your needs then we will say so. A Deloitte bankruptcy trustee always offers expert and independent advice.
If you do not qualify for or cannot afford any of the options above, a consumer proposal or bankruptcy could be a good solution to help you get out of debt.
Doing nothing isn't an option - why not take action before your creditors do? Get the help you need today!
Debt consolidation loans combine all of your debt payments into one. You can consolidate debt from credit cards, utilities, and bank loans into a consolidation loan.
Debt consolidation loans may have a lower rate of interest, so this is a good option if you have outstanding debt at higher rates of interest such as credit cards. The advantage of a debt consolidation loan is organizing of all your debt into one loan so that you are only making one payment per month at a fixed rate of interest, for a specified period of time. It takes the guess work out of your debt payments and makes budgeting easier.
In order to qualify for a debt consolidation loan you must have an appropriate credit rating and be able to meet monthly loan payments. You may also need to have someone co-sign your loan. To determine if a debt consolidation loan is right for you, please contact your bank or other financial institution.
If you are able to negotiate a lump-sum settlement or other terms acceptable to your creditors then you may not need a bankruptcy or a proposal, however, in our experience this rarely happens. With this kind of arrangement, a financial counsellor (or other professional) may be able to contact your creditors directly and negotiate with them to pay off only a percentage of your debt, or pay down your debt over a period of time. Informal proposals work best in situations where there are a relatively small number of creditors. There may be pitfalls to achieving favourable results because some creditors will not compromise their debts and there is no stay of proceedings protecting you. Unless you obtain the proper form agreement and release the deal is not legally binding.
Orderly payment of debts
This option is only available in some Canadian provinces - Alberta, Saskatchewan, Nova Scotia, and Prince Edward Island. The OPD is a legal proceeding which enables you to consolidate your debt. You are protected from property seizure and/or wage garnishees under his order.
Debt management plan
In certain provinces, non-profit debt counsellor offer a service called a debt management plan. A debt management plan is a repayment plan that repays the entire debt principal due. There is no stay of proceedings protecting you. We would recommend this in circumstances where you could afford to pay back all of your debts in a short period of time and if you owe banks or other institutions. It should be noted that Credit Rating Agencies treat this arrangement the same as a Consumer Proposal. This arraignment can only be administered by accredited debt counsellor that are from non-profit agencies.
Private debt counselling
There are many new debt counsellor in the marketplace that are not accredited. Some of these counselors have limited training and experience and they are not regulated by the government or other authorities. Some of these counsellor have a good track record of helping their clients but others don’t. Many of these companies will charge a large consultation fee when the only viable option is a Consumer Proposal or Bankruptcy. At Deloitte, our consultation is always free.
In fact on January 10, 2012, the Federal Government issued a consumer alert entitled "Debt reduction companies: Beware of too good to be true offers."