What You Need to Know About Bankruptcy Versus Consumer Proposal in Alberta

As a Canadian, you have many rights and privileges. You are also expected to meet your responsibilities in return. With that being said, there may come a time when you cannot pay your bills as they come due. If this happens to you, speaking with a bankruptcy trustee (who should also educate you on what a consumer proposal is) may be necessary for your situation. While both options (bankruptcy and consumer proposal) are designed to lift some of the stress of financial difficulties, it is important to understand the differences between a Bankruptcy vs. Consumer Proposal in Alberta. Each has its own set of pros and cons and one may be more suitable than the other based on your individual circumstances. Let’s take a closer look at both options and see which one may work best for you.

What is a Bankruptcy?

When you file for bankruptcy in Alberta, you are asking a federal court to relieve you of your various debts. You will be able to keep some of your possessions, but others may have to be sold. If you choose this option, your creditors will be unable to contact you and repossess your items. You may have to declare all of your debts, including those that are currently being paid on. You may be required to attend credit counselling courses, which are designed to help you learn how to live debt-free in the future. If you have minimal assets, minimal income, and a significant amount of debt, this may be the best option for you. This is because the process is relatively quick and you will get the relief you need to get back on your feet.

Understanding the Process of Bankruptcy

Before we discuss bankruptcy please take one piece of advice – the mental health of you and your family aught to come first. If personal finances have your stress levels so high that you struggle with daily life please seek medical advice. For bankruptcy related stress management Calgary has many options for psychologists and therapy. If your bankruptcy troubles are directly Canada Revenue Agency related, maybe a Calgary-based tax consultant can give you a solution.

There might come a time in your personal or business life when you discover that filing for bankruptcy is your only option. If this is the case, then you will want to ensure that you have the full support and backing of legal officials. Our team of highly qualified bankruptcy lawyers and trustees can offer you the support and guidance needed when apply for bankruptcy, whether it be personal or business. We have experience with thousands of clients, each with their own individual needs. This gives us the authority and knowledge needed to deal with your situation. Applying for bankruptcy isn’t an easy process, and you will need someone to guide you through it.

By building up a file and working background, we can help you discover whether bankruptcy is something that you are actually eligible for. If its not, then we will work with you through the other alternatives, to ensure that you get back on the right track and are able to handle your finances properly and efficiently. If you are eligible, then we will work with a team of lawyers, debt collectors and accountants, to ensure that you get the best possible result. Because it is a long and difficult process, you are going to want to let someone help you out.

If you try to handle it on your own, you may find yourself lacking the necessary information, and the stress will keep building. By hiring us to work with you, we will take on the brunt of the work whilst keeping you in the loop. We offer a friendly and relaxing atmosphere, to help you get through this difficult financial time. On top of this, our professionalism and expertise will allow us to take on any problem and solve it to the best of our ability. We will ensure that you are fully aware of what is going on, so that you can relax in the knowledge that your finances are in good hands.

bankruptcy basics overview

Applying for bankruptcy isn’t an easy process, and you will need someone to guide you through it. A bankruptcy trustee in Calgary can be an excellent starting place – an often, the only person you need to help fix your financial troubles. By building up a file and working background, we can help you discover whether bankruptcy is something that you are actually eligible for. If it’s not, then we will work with you through the other alternatives, to ensure that you get back on the right track and are able to handle your finances properly and efficiently. If you are eligible, then we will work with a team of lawyers, debt collectors, and accountants, to ensure that you get the best possible result.

Because it is a long and difficult process, you are going to want to let someone help you out. If you try to handle it on your own, you may find yourself lacking the necessary information, and the stress will keep building. By hiring us to work with you, we will take on the brunt of the work whilst keeping you in the loop. We offer a friendly and relaxing atmosphere, to help you get through this difficult financial time. On top of this, our professionalism and expertise will allow us to take on any problem and solve it to the best of our ability. We will ensure that you are fully aware of what is going on so that you can relax in the knowledge that your finances are in good hands.

What Is a Consumer Proposal?

A consumer proposal is a formal negotiation with your creditors that may allow you to repay a percentage of what you owe. This process is similar to filing for bankruptcy as you will likely have to make a payment plan. However, a consumer proposal does not have the same impact on your credit score as a bankruptcy does. This is beneficial if you are planning to apply for credit when the process is complete. A consumer proposal lasts for 12 months and each creditor is likely to receive a smaller payment than what you owe. There could be legal penalties for non-compliance (you may be in a worse situation if you don’t follow the agreed upon consumer proposal). If you have a significant amount of assets or are in a high-income bracket, this may be the best option for you. If you have minimal assets, a minimal income, and a significant amount of debt, bankruptcy may be a better option for you. In Alberta, consumer proposals are more popular than bankruptcy because many people have good paying jobs but ran in to some bad financial luck. The cyclic nature of the oil industry can quickly end those pay cheques and in may be several months until a good paying job returns.

Which Option is Right for You?

Each option has its own advantages, but it is important to understand the differences between them. The first thing you should do if you find yourself in a financial situation is speak with a trusted advisor who can help you understand your options. This person will look at your financial situation and help you understand which option will be best for your particular case. Bankruptcy may be a good option for you if you have very minimal assets and a significant amount of debt. A consumer proposal may be the better option for you if you have a high income and little debt.

How Does Bankruptcy Work?

When you file for bankruptcy in Alberta, you are asking a federal court to relieve you of your various debts. You will be able to keep some of your possessions, but others may have to be sold, repossessed, or put into a trust for the benefit of your creditors. If you earn a decent income, you may be able to keep your house. However, it may be put into a trust for the benefit of your creditors. You may be required to attend credit counselling courses and may be asked to provide a detailed list of your expenses.

How Does a Consumer Proposal Work?

When you enter into a consumer proposal, you are negotiating with your creditors to repay a percentage of what you owe. You may have to make payments to the trustee or the person you are negotiating with. If the consumer proposal is accepted and you make your payments, the creditor is legally required to accept the terms. A consumer proposal lasts 12 months and each creditor may receive a smaller payment than what they are legally owed. During this time, you may be able to re-negotiate your monthly payments, make smaller payments, or make no payments at all. If you fail to make your payments as agreed, the creditor can take you to court and you may be charged with an offence.

Bottom line

A bankruptcy or a consumer proposal may be helpful if you are in a situation where you are unable to pay your bills. Both options are designed to relieve you of some of your debt and stress. It is important to understand the differences between these options and how each one works. A bankruptcy may be a better option for you if you have minimal assets and a significant amount of debt. A consumer proposal may be the better option for you if you have a high income and little debt. It is important to speak with a trusted professional to help you understand your options and decide which one is best for you.