Personal Bankruptcy Selkirk – Facts, Alternatives & Options | Manitoba

Types of Debts – What Bankruptcy Can’t Do

It’s easy for people to tell you that bankruptcy helped them eliminate their debts, but do they also tell you that it’s not possible for everyone? Some debts might still have to be paid because by law, they can’t be included when you file for bankruptcy.

3 common types of debt that aren’t included in a bankruptcy are:

• Secured debts, like a mortgage or car loan
• Student loans that are less than 7 years old
• Child and alimony support payments that you’re behind on

Many people think that they need to declare bankruptcy because of their credit card debt, but if that debt is recent, creditors may not allow you to eliminate those balances with bankruptcy.

Bankruptcy Procedures – The Process of Working with Your Trustee to Attain Your Discharge

Those who have gone bankrupt might not tell you that it takes a minimum of 9 months to complete the bankruptcy process. There are costs and fees to go bankrupt, which you pay to your trustee, as well as bankruptcy counselling sessions you must attend. Depending on your circumstances, you may also need to pay extra to your creditors, which delays completing the process and obtaining your discharge. Not everyone loses their home and assets when they file for bankruptcy, but assets above what you’re allowed to keep in Manitoba will be sold by your trustee.

You should also be aware that your trustee, your creditors, the Office of the Superintendent of Bankruptcy or the Court can oppose or delay your bankruptcy discharge. Depending on your situation, you may need to attend a hearing, answer questions under oath and/or meet the additional requirements to obtain your discharge.

Credit Ratings & Bankruptcy in Canada

Bankruptcy is one of the worst things you can do to your credit rating. There is no easy way to obtain credit after you have legally eliminated your debts through bankruptcy. It takes time and patience before creditors trust you enough to lend you money again. Not being able to take out a loan, renew your mortgage or apply for a low interest rate credit card can impact your financial plans and put your life on hold.

Manitoba Bankruptcy Alternatives

By now you may be wondering which alternatives to bankruptcy could work for you. There are a number of options and the best solution might mean combining some of them. Depending on your circumstances, 4 options that you may not have considered are: consolidation loans, debt repayment programs, debt settlement options or a Consumer Proposal.

Debt Consolidation & Debt Repayment Plans

When you hear the words “debt consolidation,” you probably think that this means consolidating your bills and other debts into a new loan. This could work for you if you’ve got a realistic budget. For many people, it makes more sense to consolidate only their monthly payments. Don’t worry if you’ve been turned down for a consolidation loan by your lender. There are other types of debt consolidation to consider.

Consolidating payments doesn’t involve borrowing more money, so there’s never a problem with bad credit. That’s how a debt management program and plan with a non-profit credit counselling organization works. Creditors help by lowering or waiving interest charges while you’re making your payments. This lets you pay off your debts and saves you thousands in interest and fees. What you pay each month is based on what you can afford after you’ve had help to create a realistic budget.

Settling Your Debts

To help you pay back what you borrowed, consolidation programs and loans can help. Most people don’t want to walk away from their debts and go bankrupt, but they think they have to because they don’t know what else to do. Surprisingly, sometimes only paying back part of what you owe can also be a solution. When done properly, a debt settlement offers your creditors a lump sum of money. That might not be as far-fetched an option as you might think.

Filing a Consumer Proposal

There are also times where you need a legal alternative to bankruptcy, so a Consumer Proposal might be right. A Consumer Proposal in Selkirk is set up by a trustee, and once agreed to by your creditors, you make monthly payments to repay part of what you owe.

Which Option is Best?

As you can tell, a lot depends on your situation. When you’re just trying to make ends meet and duck the collection phone calls, you need help looking at your circumstances objectively. You need a professionally trained Credit & Debt Counsellor to help you come up with a good plan.

Non Profit Bankruptcy Information & Credit Counselling Advice in Selkirk, Manitoba

If you want to find out why someone shouldn’t declare bankruptcy, get answers to your questions about joint debts or debts left over from a divorce, or learn more about alternatives to bankruptcy, one of our Credit & Debt Counsellors can help! They are experts in helping people with their debts and money, and they’d be happy to provide you with the information you need to make an informed decision about your financial future.

Your Counsellor will:

• Explain all of your options to deal with your debts, including alternatives to bankruptcy
• Show you how to effectively manage all of your bills and living expenses
• Refer you to a bankruptcy trustee in Selkirk if it looks like bankruptcy is your best option
• Answer your questions and give you the guidance you need to know what to do about your debts

Related Links

• The Office of the Superintendent of Bankruptcy in Manitoba
• Insolvency Glossary
• Credit Counselling Society Manitoba office locations

The Credit Counselling Society also offers assistance to people who need help with their payday loans in Selkirk (even online ones).