With household debt soaring, more North Americans are in debt than ever before in history. This is at least partly the natural outcome of a consumer society rooted in acquisition of material goods. Getting the latest whatever has become an integral part of individual self-esteem and sense of worth. Small wonder then that people are turning in droves to services like consumer proposal Toronto or Bankruptcy Toronto in an attempt to get their financial lives back under control.

You know you are in trouble is you are starting to use credit cards to pay for weekly household expenses such as groceries or rent or if you are unable to make more than the smallest minimum payment on your monthly credit card bill. Or you may be starting to hear from collection agencies or receive urgent re-payment requests in the mail.

These are the warning signs that you need to take steps to get back on track. It may be too late to get help from a normal bank. Many people turn to services and agencies that specialize in debt management such as a bankruptcy trustee or credit counselor.

A bank or private lender can consolidate debts that are unsecured, namely credit card balances or personal loans. This may result in a single monthly amount paid over a longer period of time. But this kind of loan can be difficult to qualify for if personal credit ratings are already compromised and weakened by late payments. A credit counselor will consider whether it is too late for debt consolidation and put forward another approach such as consumer proposals or declaring bankruptcy.

A consumer proposal is when special terms are requested of creditors. Interest on outstanding balances may be waived or monthly minimum payments might be lowered in an effort to have the debt honored rather than written off as a result of bankruptcy. Most creditors will agree to a consumer proposal rather than risk losing the entire amount owed.

Bankruptcy is declared when the debtor has no hope of making payments as they become due. It requires meeting with a Toronto Bankruptcy Trustee who files the bankruptcy documents with the government and oversees the terms of the bankruptcy agreement. Those terms may require the debtor to fulfill certain tasks such as attending meetings or credit counseling sessions. All debts must be included with the bankruptcy program.

The positive aspect of bankruptcy is that a person is allowed to keep their possessions and if their wages are being garnished, it will stop. So will any harassing phone calls from collection agencies. Any assets are divvied up between creditors. It takes about 9 months to work through the bankruptcy and then it is discharged.

It can take a lot longer than 9 months however, to rebuild a good credit rating after a bankruptcy. So consider consumer proposal Toronto and Bankruptcy Toronto with care. There is almost always a way to tackle a debt mess with the help of qualified experts. But the sooner steps are taken to rectify that problem the better.

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

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