Bankruptcy Alternatives

	Bankruptcy Alternatives - Money Problems Radio Show  (Opens in a new window. Optimized for Windows Media Player 6.4 and later versions.)
Originally aired on March 25, 2006

Show Topic:

On this show we have discussed personal bankruptcy as a way to deal with your money problems. But what are your bankruptcy alternatives?

On today's show we discuss a number of alternatives to bankruptcy.

Guests:

Douglas Hoyes is the co-founder of Hoyes, Michalos & Associates Inc, one of Ontario's leading personal insolvency firms. They emphasize a fresh start when dealing with money problems, and file dozens of consumer proposals and personal bankruptcies every month. Doug can be reached at www.hoyes.com or, in Ontario, at 310-PLAN (no area code required).

Robert Floris is a mortgage consultant in Hamilton using his many years of experience to serve clients in Hamilton, Ancaster, Dundas and Grimsby. Robert can be reached at 905-574-9200 ext. 215.

Show Summary:

Doug Hoyes explained that while personal bankruptcy is necessary for some people, it does have a negative impact on your credit report, so it should be considered as a last resort. It's important to consider all of your bankruptcy alternatives first.

The most obvious bankruptcy alternative is to pay your bills. If you have a good job and can deal with your debts on your own, that is clearly the best alternative, because your credit will remain healthy, and you will be able to borrow in the future. If you are in a temporary rough spot, deferring a payment on a debt is also an option. For example, your car loan lender or mortgage company may allow you to defer a payment, providing you get caught up at a later date.

Robert Floris explained that your next option, if you own a house, is to refinance your existing mortgage, or get a second mortgage, and use a low interest mortgage loan to repay your high interest credit card debts. Your monthly payments will be lower, and you will repay your debts faster.

Credit counselling and consumer proposals are the final obvious bankruptcy alternative. You make a deal with your creditors, and have one manageable payment each month.

Question of the Week:

Q. I don't want to go bankrupt. I owe $36,000 on my credit cards. I want to pay them, but I can't afford the minimum payments each month. What are my alternatives (I don't want to go bankrupt).

A. If you own a house, the first answer may be to re-finance to repay your debts. Even if you don't own your own home, a debt consolidation loan may be a possibility if you have good income. A consumer proposal may be an option. Again, it will depend on you having sufficient income to make a repayment plan. If you cannot work out payment arrangements, a personal bankruptcy may be necessary.

Don't let your Money Problems overwhelm you; contact a bankruptcy expert today for more information about your bankruptcy alternatives.