Personal bankruptcy, a solution to settle your debts ?
Personal bankruptcy is a legal means that allows you to have no more commitment to your creditors and thus eliminate the bulk of your debts. We owe this legal way of debt resolution to the Bankruptcy and Insolvency Act.
You can resort to personal bankruptcy when you are unable to repay some of your debts. This is the right solution when you can no longer meet your monthly payment commitments. On the other hand, when you lose your job, your expenses exceed your income or when a lot of creditors are suing you, personal bankruptcy is the appropriate solution. You can discuss your financial situation with your authorized trustee so that he can tell you if the right solution is to declare you bankrupt.
Being in debt to the neck is not an end in itself. Many solutions proposed by insolvency trustees exist. Among these solutions, there is the consumer proposition. What does this theme refer to?
The concept of a consumer proposal
This process to settle your debts has several advantages. With the consumer proposal, you can significantly reduce the cost of your debts. This type of solution also has the advantage of avoiding bankruptcy and at the same time, you can easily keep your various assets and assets. You will become more accountable to yourself and respect the commitments you have made to your various creditors.
You have debt problems and you are clueless … Have you ever heard of the debt consolidation loan ? This is a solution that could be of great help in your debt situation.
The debt consolidation loan: what is it exactly?
In a debt situation, many people can help you. Among legal persons, there are financial institutions. These institutions are willing to give you a loan so that you can repay most or all of your creditors. The financial institution is the only one that you have to report in the end, repaying the loan it has given you.
What are the advantages of a consolidation loan?
By opting for such a process, you group all your claims into one. This streamlining allows you to have better control of your financial situation as well as a better view of your receivables. In addition, the interest rate of such a solution is lower than the one you have to pay to your various creditors. For example, you are well aware of the high interest rates on credit cards.
Before embarking on such a path, it is good to know that the consolidation loan is not suitable for all debts. In addition, you must not only have an acceptable credit rating, but also a decent income. These steps are taken to ensure that you are able to make the monthly repayments to the financial institution that granted you the loan.
You can ask your bank for advice, but know that insolvency trustees are also available to advise and guide you.
What if you opt for voluntary deposit?
In which case the use of such a solution is a way out of a delicate financial situation?
Voluntary deposit: what is it?
In Quebec, voluntary deposit is a process that allows an indebted person to make monthly payments to the court. The amount of these payments depends on the income of the indebted person as well as the number of people who are dependent on him. It is then up to the court to make a distribution to the different creditors according to what is due to each one of them.
It is a monthly commitment that you make and that you must respect. To calculate the monthly payment you need to make, the courthouse of where you live is based on your monthly pay as well as your family responsibilities.
The voluntary deposit is a solution that avoids you to go to the stage of the declaration of bankruptcy. Many people are not ready to declare bankruptcy, voluntary deposit is therefore a solution that can spare them this situation.
In addition to this, by using voluntary deposit, you avoid that your salary is seized by your creditors. In addition, it is a solution whereby you will pay only 5% interest on your debts to all your creditors.