For many Canadians who are struggling with debt there are many choices to make. The most common two options available are bankruptcy and consumer proposal Toronto. Both options provide relief to the customer who cannot meet the demands of their current creditors. Each method can benefit the client in different ways.

For those considering bankruptcy they should expect the process to take several months to totally complete. There are steps that must be completed not just by the person filing but by the creditors. Then a court date can often need to be booked far in advanced. Bankruptcy allows customers to be dismissed of their debt or have a new payment plan enforced if approved in court.

Generally a consumer proposal purpose is to allow debtors to continue to make payments but arrange a payment plan with their creditors they can handle. These dealings can take a broad range of time to complete. Some clients can settle with their debtors in just a few months while others take years. The time frame is affected by the amount of debt the client owes debtors and their available income.

However there are some guidelines a client must fall under in order to file. The client must owe less than $75,000 to creditors other than their first mortgage. Most debts can be worked out with companies if the consumer can make repayment in a timely manner.

The main reason clients choose to do a consumer filing over a bankruptcy is that they are able to keep the items they are paying on. The new payment plan may also allow a client to save money because they are not charged interest during the plan.

People who are unable to pay back their debt due to a lack of income or enough income may decide to file bankruptcy. In this type of filing a person can be dismissed of pay anything back to their lenders but they also will lose items they have no finished paying off. Depending on what bankruptcy type is filed some consumers are able to pay a reduced amount on their assets in order to keep their home or car. Most debts can be discharged in a filing but rarely are student loans dismissed.

The main benefit of this type of filing is the ability of the client to almost start over in their financial status. After the case is closed lenders can no longer seek to collect any debts. Generally those who file for debts to be discharged have a harder time getting financing after and may also have to pay higher interest rates until a certain amount of time has elapsed. After this time frame and if they have worked on their credit scores they may be able to get normal lending. This type of discharge remains on the persons credit report for up to fourteen years.

Depending on what the clients circumstance speaking with a lawyer may guide them in the right direction. Those struggling to make high payments and meet the guidelines may want to look into a consumer proposal Toronto. Most choose getting their debts discharged as a last resort.

Author Bio: Offering a FREE no-obligation consultation, Bankruptcy Barrie experts have been helping Canadians for over 30 years.

Category: Finances
Keywords: bankruptcy, debt settlement, consumer proposal, bankrupcy trustee, financial services, finance