Can I solve my financial problems without losing my house or my car?

Yes! The first step to take when encountering financial difficulties is to prepare a budget and consider cutting certain expenses in order to create a monthly budget surplus which will allow you to respect, or better yet accelerate the reimbursement of your debts.

If this turns out to be impossible, you can consider making arrangements with each of your creditors (if they are not too numerous). The goal is to reduce the monthly payments and ideally reduce either the interest rate, or the amount of the debt, or even both. Creditors normally appreciate if a reasonable effort is made to find a solution. They will prefer that to the risk of losing everything in the event that you declare bankruptcy.

Another alternative to be considered is a debt consolidation which is a loan from a bank, a credit union or a family member large enough to reimburse the smaller creditors and propose a plan to reimburse the major loan over a longer period of time. This has the advantage of maintaining a good credit rating, regrouping all your various payments into one and it normally reduces the interest rate. Moreover, opting for the debt consolidation, you will avoid declaring bankruptcy, and you will keep your house, your car and maintain a good credit rating score.

If none of these options are possible, you can consider the possibility of filing a consumer proposal which is an effective tool to regroup your payments and to reduce it to one that corresponds to your financial capacity. As soon as you file, all interest on the debts are reduced to zero. The favourable vote of the majority of your creditors binds all creditors. Once you have respected the terms of your proposal, you will obtain a waiver of your debts (except those provided for by the law) while keeping all of your assets.

Finally, there exists the voluntary deposit, although considered somewhat archaic. Under this system, you must deposit at your local courthouse a portion of your wages (30% before income taxes, less some minor deductions) which will be distributed amongst your creditors. The yearly interest rate is reduced to 5%.

Only bankruptcies and consumer proposals must to be done through a trustee. All the other options may be done without the intervention of a professional.