About 90,000 Canadians file for bankruptcy each year. That number is down dramatically from where it was just a few years ago when almost 140,000 Canadians were filing for bankruptcy on an annual basis. But it’s obviously still higher than many Canadians would like. Are you on the brink of filing for bankruptcy? If so, you should know that there are several alternatives to it that can help you with credit recovery.
You might not need to file for bankruptcy and live with the poor credit history that will come along with it. We’ve compiled a list of options that can provide you with the debt relief you’re looking for and allow you to achieve credit recovery in the end. Check out these alternatives to bankruptcy below.
Signing Up for Credit Counseling
If you’re in debt at the moment and having a tough time figuring out how to get out of it, you should know you’re not alone. Canadians have almost $725 billion worth of debt (not including mortgage debt!) collectively.
Knowing you’re not alone in your fight against debt should provide you with some small sense of peace. It’ll help to know you’re not the only one fighting this battle. It should also motivate you to want to get out of debt fast.
Signing up for credit counseling might be the first step you should take when it comes to getting yourself out of debt. This type of counseling will equip you with the knowledge and the tools you’ll need to work your way out of debt.
You aren’t going to be able to eliminate debt overnight. But credit counseling can put you on the path to doing away with debt and make credit recovery feel like a real possibility.
Aggressively Paying Down Debt
When you have a whole bunch of debt hanging over your head, it’s easy to feel hopeless. It’s going to seem like it would take a lifetime to get all this debt squared away.
But if you’re willing to get aggressive with your debt, you might be able to pay it off within just a few years at most. You should think about using either the debt snowball or debt avalanche method to do it.
Both of these methods will involve you attacking your debt with a vengeance by doing whatever it takes to get it done. It’ll call for you to do things like get a second (and maybe even third!) job and sell anything that you can to earn more money to pay down debt.
Just like with credit counseling, getting aggressive with your debt isn’t going to knock it all out overnight. But it will make your debt more manageable overall and lead to it disappearing over time.
Looking Into Debt Consolidation
Do you have a bunch of different types of debt that are all making it difficult for you to get a handle on it? This is when you might want to consider looking into debt consolidation.
What is debt consolidation? Well, it involves taking out a debt consolidation loan to pay off all the various forms of debt you have. It’ll put all these types of debt under one umbrella and allow you to make one monthly payment on it.
In many instances, you’ll be able to get a better interest rate on your debt by taking this approach. You’ll also be able to avoid late fees that are the result of you forgetting to make a monthly payment on a particular type of debt.
You’ll find that paying down debt will be so much easier when it’s all in one place. It’ll put any thoughts of bankruptcy right on the back burner.
Giving Debt Settlement a Try
Did you know that many of your creditors might be willing to work with you to bring down your debt if you just ask? They’ll be especially motivated to work with you if you mention that bankruptcy might be in the cards for you.
If you owe a creditor, say, $2,500, you might be able to call them up and offer to settle your debt for $1,200 by making a payment to them today. They might accept this offer from you and wipe out the other $1,300 in debt because you made them a settlement offer.
Of course, not all creditors are going to allow you to take advantage of debt settlement. But you might be able to convince some of them to take you up on your offer.
Taking More Drastic Measures
If you’re on the brink of bankruptcy and trying to find a way to steer clear of it, you might want to get extra drastic. Selling your home and using the profits you’re able to make from it to pay off your debt might not be out of the question.
This isn’t going to be an ideal situation for you, especially if you love the house you’re living in right now. But it could put you in a better financial spot and allow you to buy another home in the not-too-distant future.
You will have to weigh whether or not doing something like this would be worth it. But you might want to at least explore this option before declaring bankruptcy and seeing your immediate financial future go down the drain by saddling yourself with bad credit.
Credit Recovery Is Possible
You aren’t going to be able to achieve credit recovery in a matter of just days, weeks, or even months in most cases. You’ll need to work hard to get your credit history into a better place.
But you can start taking steps in the right direction, and Kingcash can help. We offer online loans, including no credit check loans, that can be used for debt consolidation purposes. We’ll show you how to get your hands on fast loans in Canada with ease.
Are you interested in learning more? Contact King Cash today or poke around on kingcash.ca for additional information.