You have a lot of debt and despite your efforts to pay them back, you are getting nowhere, either only making minimum payments that are only covering interest or missing payments altogether. Filing for bankruptcy may be tempting and it may be a good idea, however meeting with a bankruptcy trustee may uncover a plethora of other options. Here are 5 ways a bankruptcy can help you.
1. Advice
When you are drowning in debt and cannot seem to get a grasp on them, you may need to speak to someone with experience in such matters and who can help. This is the reason why many people in this situation turn to bankruptcy trustees.
A bankruptcy trustee can meet with you for free at a time that works for you. He/she can review an inventory of all of your debts and assets. The trustee can develop a plan based on the services that he/she can provide you with the end goal of ridding you of your debt burdens.
2. Variety
When you think of the occupation of a “bankruptcy trustee”, it is understandable to think that filing for bankruptcy is the only thing they can assist you with. While this is a big part of their job, bankruptcy trustees have a lot of other services to offer, even allowing you to avoid having to file for bankruptcy.
Bankruptcy trustees offer many different financial services and as a result, they will not push you towards filing for bankruptcy until all other options are considered. This is helpful because these options, if viable, will not be as damaging to your credit as bankruptcy would be. From credit counselling to consumer proposals, bankruptcy trustees know how to apply to best solution for your unique situation.
3. Proposals
Consumer proposals are agreements between you and the lender where a specified amount that is less than the total amount owed will be paid back in exchange for the matter to be closed. It is beneficial for both sides because you do not have to pay back the full amount and the lender recovers at least some of the debt where they probably would not have if a consumer proposal was not filed.
A consumer proposal is beneficial when you have some money to go towards a debt but cannot possibly cover the full amount. However, you cannot file one on your own. A bankruptcy trustee can present a consumer proposal to a lender on your behalf and negotiate an amount to pay back that is realistic.
4. Protection
Despite your best efforts to pay back your debts, you are constantly being harassed by lenders by letters and telephone calls threatening action if you do not pay up by a specified date. This can be frightening, frustrating and demoralizing because you know you are doing your best to pay them.
Meeting with a bankruptcy trustee is beneficial when you are being contacted by lenders because they can provide you with the protection you need. Whether you agree to a consumer proposal or follow through with a bankruptcy, lenders cannot contact you after either one is finalized. A bankruptcy trustee will ensure the lenders abide by this obligation to refrain from contacting you.
5. Counselling
You file for bankruptcy or agree to a consumer proposal and in doing so are given a clean slate financially. However, it is beneficial to take steps to learn how to not find yourself in a similar situation in the future.
A bankruptcy trustee can meet with you regularly after steps are taken to address your debts. Not only is this required by law after filing for bankruptcy, the credit counselling offered can guide you in developing a budget that is realistic for you. It will show you how to use credit wisely and will allow you to avoid unmanageable debts from now on.
