Debt Consolidation in Ontario: Alternatives to Personal Bankruptcy

Although credit problems receive more publicity in the U.S. than in Canada, it is not unheard of for some Canadians to get into financial trouble due to unpaid loans, whether they be lines of credit or large credit card balances with financial institutions. A recent survey from a reputable bankruptcy trustee shows that one out of twenty Canadians is dangerously deep in credit card debt. One out of twenty may not seem like a huge figure, but consider for a minute Canada’s total population of approximately 35 million to understand just how many individuals are presently in a tight financial spot.

Another study by Statistics Canada reveals that in 2012, Canadians owed $1.65 for every dollar they earned – the so-called debt-to-income ratio. This ratio has been steadily climbing over the past several years as more and more Canadians take on debt and at the same time minimize savings. Those in debt should immediately find ways to solve their problems before things get way out of hand. One way to do this is to sign up for a service like debt consolidation in Ontario through a reputable bankruptcy trustee and consumer proposal administrator like Paddon and Yorke Inc.

There are two ways that Paddon and Yorke may assist a person in dealing with their mounting debt load. The first is similar to traditional consolidation in that it allows for manageable monthly payments to settle the entire debt, typically by paying only a portion of the overall debt back. This form of settlement is called a consumer proposal. A debtor, instead of filing for personal bankruptcy, may offer to their creditors a full or partial settlement of their total debts over a maximum period of five years. This would translate into a manageable monthly payment plan as allowed for in one’s budget to settle most of a person’s outstanding debt. As soon as a consumer proposal is filed, interest on the debts stop, and immediate protection is received from wage garnishments, bank account garnishments, asset seizures, or any other type of collection activity.

The second option for dealing with mounting debts would be to file an assignment in bankruptcy. This is a last resort option if one’s financial obligations cannot be met. An assignment in bankruptcy usually relieves a person of most of their debt, and collection or court proceedings will cease as well. In a nutshell, bankruptcy is a legal process whereby a person assigns to the trustee their assets, except for those that are exempt by law, and the trustee realizes on the assets and distributes any proceeds to the creditors.

Debt consolidation or the filing of a consumer proposal as a form of financial help for Ontario consumers may seem rather paradoxical, given that it usually entails monthly payments over an extended period of time. Yet with a skilled bankruptcy trustee or proposal administrator to provide expert guidance, the payment of a manageable monthly amount to settle one’s debts may indeed be the best way out of financial difficulty.

When managed properly, credit can provide the means to enjoy a comfortable life. It’s also useful to have available lines of credit in the event of emergencies. Meanwhile, those who wish to avoid sinking further into personal debt can count on a reliable firm like Paddon and Yorke Inc. for appropriate solutions.