In today’s world, most people find it hard to stay debt-free for various reasons; this, however, is not to say that it is an impossible feat. There really is no problem with having debt as long as you can comfortably manage it. This is not the case for quite a number of people in Toronto. After years of borrowing and living on credit, they eventually come to the realization that their debt has spiraled out of control. While it is unsettling to be in such a situation, all hope is not lost; you still have options.
Credit counselling is vital because it helps you find solutions to your debt problem regardless of how critical it might be. You should seek credit counselling from a certified credit counsellor and not just family and friends. A credit counsellor will help you find paths with the least resistance as far as dealing with your debt problem is concerned. He or she will sign you up to the most appropriate debt management program.
On the other hand, a great tool for debt counselling is the consumer proposal. It is one of the most popular debt management options. In this case, you will need a bankruptcy trustee to help you with the nitty-gritty of the process. First and foremost, the trustee will file the proposal which must be approved by those to whom you owe the most money. A fee of 750 dollars will be required in order to facilitate this first step. After the creditors agree to your proposal, a similar amount will be charged in order to get things going.
The trustee will also negotiate with your creditors in an attempt to find the most suitable arrangement under which you can pay off what you owe. It is important to note that under a consumer proposal, you will be required to clear your debt within 5 years. If you fail thrice to make the necessary payments, your creditors could take you to court. If this ever comes to pass, you might be forced to file for bankruptcy so as to prevent creditors from coming at you full swing.
If you file for bankruptcy, you’ll still need the services of a bankruptcy trustee. You will hand over your assets to the trustee who will then proceed to sell them so as to pay off some of the money you owe. By signing for bankruptcy, your creditors will no longer deal directly with you; all engagements will be between them and the trustee.