Bankruptcy is practically a swear word in the world of personal finance. It is such a dramatic solution to the problem that most people want to avoid it altogether. That is understandable. A bankruptcy can have terrible impacts on your credit rating and other factors as well. For many people it is also personally embarrassing and not something that they even want to contemplate. That is why a consumer proposal Mississauga alternative is just what the doctor ordered in many cases.
Things To Think About Before Bankruptcy
Most people look at bankruptcy when they have amassed a large amount of personal debt. This could come in the form of credit card debt, medical bills, or other expenses that have been adding up over the years. While bankruptcy can provide a clean slate from many of those debts, it is also a sign that you may not be a great person to lend to in the future. If you declare bankruptcy you can expect that lenders will be hesitant about lending to you again in the future. A bankruptcy trustee can make it happen for you, but you will want to consider an alternative to bankruptcy first.
Negotiating With Creditors
One thing that should be done that people often do not talk about is simply coming clean with creditors. If you explain the situation to them, they are likely going to at least listen and perhaps even offer some helpful advice. They may also be willing to work with you on getting these debts paid on a timetable that works better for you. After all, those that you owe money to would like to at least see some of that money rather than get nothing at all.
A Consumer Proposal
The most straightforward way to work on debt repayment is to do what is called a consumer proposal. It is basically exactly what the name sounds like. It is the consumer (aka you) proposing a settlement of sorts to those who are owed money. The consumer comes up with a number that they can reasonably afford to pay back and makes that offer to the credit card company or other lender. They then agree to the terms and this helps the consumer to avoid bankruptcy.
A consumer proposal has to be reasonable, but this does not mean that it has to be entirely in favor of the debt holder. Rather, many consumer proposals are very advantageous to the consumer. The creditor just wants to get some money from this individual, and the consumer wants to spend as little as possible to get out of this problem. It is a win-win solution for both sides.
This is a great way to approach the problem. Always remember that you are not the only one facing these issues. The credit card companies have dealt with cases like yours in the past and they will again in the future. Try to work with them to help yourself and them out at the same time.