This week we are exploring bankruptcy alternatives. We’ve discussed using a budget to fix your problems on your own, and getting a debt consolidation loan. If you don’t qualify for a loan, your next step to consider would be a debt management plan through a credit counsellor.
Like a debt consolidation loan, in a debt management plan you repay all of your debts in full. However, in most cases in a debt management plan you don’t pay any interest, or you pay interest at a very low rate. That allows more of your payments to do towards repaying your debt.
Your creditors must agree to a DMP, and again it will only work if it’s affordable for you, so check our debt options calculator to start doing the math to see which option will work best for you.
