No one plans to get into trouble with their debts. However, when it happens, taking steps sooner than later to deal with your creditors will help keep things from getting worse.
Communicating effectively with your creditors helps them understand your circumstances. They want to know if your situation is temporary, like a lay off, or permanent, where you won’t be able to get back to work any time soon. Creditors also want to know if you’re able to make some payments or if you’re not able to pay anything at all towards your debts.
It’s important to gain the co-operation of your creditors as you work through a difficult financial time. When they know what they can expect from you, it’s easier for them to find ways to help you and you’ll know what you can expect from them in return.
When You Aren’t Able to Make Any Payments
There’s a big difference between wanting to pay your debts and being able to pay your debts. No one doubts that you want to honour your payment commitments, but sometimes you’re just not able to. Communicating with your creditors in writing may be the best thing to do if you aren’t able to pay your debts.
Communicating with your creditors may sound frightening at first, but knowing how the process works will make it easier.
Does it Make Sense to File Bankruptcy if I Can’t Pay My Debts?
What alternatives do I have to filing bankruptcy?
Another way of communicating with your creditors is through a bankruptcy trustee. Bankruptcy is a legal process that tells your creditors that you’re not able to pay your debts. Regardless of what you try first to deal with your debts, or if you've considered many bankruptcy alternatives, you still have the option to file for bankruptcy later on if you need to.
Bankruptcy is an extreme solution to debt problems and it should never be your first option. However, depending on your level of income, what your assets are, where you work and what your long-term financial situation looks like, bankruptcy might be the right option for you.
To find out more about declaring bankruptcy, contact us to speak confidentially with one of our Credit Counsellors. Bankruptcy in Canada is not a free process and it has long-term implications. To make an informed decision, you need to get the facts before you declare bankruptcy because you’re not easily able to back out of the bankruptcy process once it’s been started.
When You Run into Trouble Making All of Your Payments
When someone isn’t able to pay their debts, they need to communicate effectively with their creditors. However, if you’re able to afford at least some of your payments, there are many options for dealing with your debts. Feel free to contact us to learn more.