Dealing with Your Creditors Legal Threats, Is Edmonton Bankruptcy the Only Answer
In the initial stages of slipping into severe financial difficulty in Edmonton, creditors with whom you have missed a payment send gentle reminder letters. At that point, no one thinks of an Edmonton bankruptcy as a way of dealing with his or her creditors.
As you get further behind, the letters morph into telephone calls, usually not so gentle. Before long, the collection language escalates into threats of legal action.
Then a strange thing happens – the creditors fail to back up their threats with action. Some residents mistakenly believe this is evidence the threats are nothing more than scare tactics, designed to frighten them into paying up, even if they cannot afford to.
In reality, they are scare tactics, but the real reason legal action is delayed is the cost to the creditor. For example, to get a court order to garnish your wages for what you owe, a creditor must go to court not once, but twice.
The same is true for property attachments. First, they must go to court to get a judgment that the debt is valid and you are required to pay. Then they must get an order to attach your property for repayment.
Once legal action is in place, frightened residents believe declaring personal bankruptcy is their only option. They often know a bankruptcy proceeding will stop legal actions underway.
However, an Edmonton bankruptcy is not the only way to get legal protection. In Alberta, you have two other debt solution options – a consumer proposal, and an orderly payment of debts.
Both are non-bankruptcy debt solutions that are part of the federal Bankruptcy and Insolvency Act of Canada (BIA.) Consumer proposals are only available through licensed bankruptcy trustees in Alberta. An orderly payment of debts is only available through a government approved non-profit credit-counseling agency in Alberta.
They are similar in that both involve substituting your multiple unsecured debt repayments with a single lower monthly payment. The payments are distributed to creditors over an extended period of time.
The difference is in how much you repay. In an orderly payment of debts, you repay all you owe, at a lower interest rate. Some residents have too much debt to repay in the time frame, so for them a consumer proposal is used, which reduces the total debt owed.
To find out if you qualify for one of these options, schedule an initial consultation with a licensed trustee or approved credit counselor in Alberta. In most cases, these initial meetings are free of charge.
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