Debt management program
Essentially, a debt management program (DMP) is a professionally supported debt repayment plan. Working with a credit counselling agency, you enrol in a DMP and make one monthly payment to them. Then, they distribute the payment to your creditors as agreed.
Debt settlement is an attractive option for many people as it can often mean settling your debts for less than you owe. Working with a settlement company, you enrol in a debt settlement program. Then, the settlement firm negotiates with your creditors on your behalf, often lowering the amount you owe in the process.
A consumer proposal is the second most common consolidated credit solution you will hear about after bankruptcy. In this case, it means settling with your creditors for a lesser amount than you owe them.
As we explain in this post,
“A consumer proposal provides a cash settlement solution to your creditors while allowing the individual to retain their assets and reduce the damage to their credit status. A consumer proposal is an alternative to bankruptcy while offering the creditors a more significant cash settlement while avoiding the stigma of bankruptcy.”
Consumer proposals are the best-consolidated credit solution for many people. If the creditors approve, they tend to offer more than bankruptcy. Additionally, they allow you to keep your assets and pay lower monthly premiums proactively. A consumer proposal is often a good route to take, but it’s best to consult an expert.
Finally, we come to bankruptcy as a consolidated credit solution. Filing for bankruptcy involves turning your assets to a licensed insolvency trustee to help ensure your creditors get some of the debts you owe them.
Bankruptcy does erase your debts in a sense, but this comes with other consequences. To mitigate future financial risk, your licensed insolvency trustee will ensure you understand the warning signs of financial difficulties, the role credit plays in your life, and how to obtain and use credit in the future.
To qualify for bankruptcy in Alberta, you must:
- Owe more than $1000
- Be insolvent (this means you are unable to pay your debts as they become due)
- Live or do business in Canada
- Have more debts than assets
Are you ready to discuss which of these consolidated credit solutions is best for you? The experienced, non-judgemental, and compassionate team at Fox-Miles & Associates is here to help. So call us today to get started.