Personal Bankruptcy Montreal – Facts, Alternatives & Options | Quebec

Types of Debts – What Bankruptcy Won’t Do For You

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 kinds of debt that are excluded from bankruptcy are:

• Secured debts, like a car loan or mortgage
• Student loans, if they are less than 7 years old
• Child and alimony support payments that aren’t up to date

Also, if you recently racked up credit card bills and now want to go bankrupt, creditors may stop you or ask that you pay more, before they let you get rid of the debt through bankruptcy.

The Bankruptcy Process – Working with Your Trustee to Obtain Your Discharge

It’s not well known, but it takes at least 9 months to go through all the steps of the bankruptcy process. As part of the process, you make payments to your trustee for the costs and fees of going bankrupt, and you also have to attend two bankruptcy counselling sessions. Completing the process and getting discharged takes longer if you need to pay extra to your creditors because of your situation. If you have assets or too much equity in your home, above what you’re allowed to keep in Quebec, your trustee will sell your assets for you.

Many people aren’t aware that their trustee, their creditors, the Office of the Superintendent of Bankruptcy or the Court could oppose or delay their discharge from bankruptcy. Depending on someone’s situation, they may need to attend a hearing, answer questions under oath and/or meet additional requirements to obtain their discharge.

Your Credit Rating & Bankruptcy in Canada

Bankruptcy is noted on your credit report and seriously impacts your credit rating. Despite what people say, getting credit after you have eliminated your debts legally through bankruptcy is not easy. It takes patience and time to prove yourself to creditors again. Until they trust you enough to lend you money again, your financial plans might be on hold because you won’t be able to take out a loan, renew your mortgage or apply for a low interest rate credit card.

Alternatives to Bankruptcy in Quebec

By now you are likely wondering what alternatives to bankruptcy really exist. There are quite a few, and combining them might also be a solution. Depending on your situation, 4 options that might work for you are: consolidation loans, debt repayment programs, debt settlement options or a Consumer Proposal.

Debt Consolidation & Debt Repayment Plans

Consolidation usually means consolidating your bills and everything you owe into a new loan. With a fine-tuned budget, this might work for you. For other people, consolidating only the monthly payments makes more sense. Don’t worry if you’ve been turned down by your bank or credit union. There are other types of debt consolidation that may be available.

When you consolidate payments, you don’t actually borrow more money, so bad credit is never a problem. That’s how a debt management program with a non-profit credit counselling organization works. Your creditors will help you by lowering or waiving ongoing interest charges. This saves you thousands of dollars in interest and lets you repay your debts. The amount you pay each month is based on your budget and on what you can afford.

Debt Settlement

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.

Consumer Proposal

Sometimes a legal alternative to bankruptcy might be what you need. A Consumer Proposal could be the right solution depending on your situation. A Consumer Proposal in Montreal is arranged by a trustee, and by making monthly payments, you pay back part of what you owe. Your creditors have the option to agree to the proposal or not.

Which Option is Best?

The right solution to your debts depends on your circumstances. When you’re busy just trying to get from one pay cheque to the next and avoiding collection calls, you need help to look at your situation with a fresh set of ideas. You need a qualified Debt & Credit Counsellor to help you come up with a good plan.

Non Profit Bankruptcy & Credit Counselling Information & Advice in Montreal, Quebec

One of our expert Credit Counsellors can help if you need answers to questions about joint debts, have questions about debts left over from a divorce, want to learn more about alternatives to bankruptcy, or want to know more about how going bankrupt would affect you. They are experts in helping people come up with good solutions to deal with their debts, and would be happy to provide you with the information you need to make an informed decision to get your finances back on track.

Your Counsellor will:

• Explain all of your bankruptcy alternatives and debt relief options
• Show you how to budget effectively for all of your household expenses
• Recommend bankruptcy trustees in Montreal if it looks like declaring bankruptcy is the right option
• Provide answers and information so that you can choose the best way of dealing with your debts

Related Links

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

The Credit Counselling Society also helps those who are having difficulty with their payday loans – even online loans – in Montreal, Quebec.