Debt is an ordinary part of life in Canada and it isn’t always a bad thing. It’s a normal part of buying a car, a house, starting a business, or getting an education. Without it, many Canadians would never be able to afford their own homes or realize their personal goals and dreams. But too much debt can put your financial future in jeopardy, taking over your life and preventing you from moving on. When debt collectors start harassing you or when legal action from creditors garnish your wages, you may not be able to see a way out. Living to pay off your debt is no way to live at all, especially when your creditors still won’t leave you alone.
Toxic debt is what happens when your debt repayments cost too much money. For example, if the annual percentage rate you pay is above 36%, it’s considered toxic. A double-digit APR, such as you might have on your credit card, is also a bad sign if you’ve accumulated too much of it. If you feel like you’re drowning in debt, it’s time to call a Licensed Insolvency Trustee to get help. They can help you find a way to restructure and start rebuilding. Typically, you have two options: bankruptcy and a consumer proposal.
Two Paths: Bankruptcy versus Consumer Proposal
When you file for bankruptcy, you surrender your assets to the Trustee. This is not an ideal solution, as it can put you under extreme hardship and wipe out assets you’ve built over a lifetime. A better alternative, and one that a Licensed Insolvency Trustee will recommend first, is a consumer proposal.
Consumer Proposals Toronto
A consumer proposal must be filed by a Licensed Insolvency Trustee, after which your creditors must vote on the proposal. While they are not obligated to accept it, they often do, and if the majority of creditors accept a consumer proposal in Ontario, all of them are bound to the contract. You can find more information at www.davidsklar.com about what a consumer proposal in Ontario means. In short, it’s a way of restructuring your debt so that you owe less and have more time to pay it. Creditors typically agree to these proposals because they have a better chance recouping some of their loans than if you declare bankruptcy, while you avoid surrendering your assets.
One of the biggest consumer proposal Toronto firms is David Sklar & Associates, a firm that handles consumer proposals, personal bankruptcy, corporate bankruptcy, and credit counselling. Besides filing a consumer proposal on your behalf, a Licensed Insolvency Trustee can also offer credit counselling courses that teach you how to better manage your credit in the future and rebuild your financial situation now. Once you’ve lived through debt restructuring or bankruptcy once, you won’t want to relive the experience. Credit counselling from a firm like David Sklar & Associates can give you the financial literacy skills to use credit, rebuild your credit rating, meet your financial objectives, and start over. Get help when you’re in over your head with debt. You can stop the collector calls, end the garnish on your wages, and keep your assets.