Should you declare bankruptcy or should you make a Proposal to your Creditors?

Ken Ntiamoa |

Should you declare bankruptcy or should you make a Proposal to your Creditors?

As the calls from Collection agents continue unabated and you are spending sleepless nights worrying about what to do, may I put you on your toes by this article?

You have three options, no, four actually. The first is to do nothing and hope the calls and its associated problems will go away. The fact is that they will not go away until you act. Even if the calls do stop, it doesn’t mean the debts have been forgiven. Your file may be purchased by another collection agency. You may be summoned to appear in court by a collection agency or a lawyer representing the collection agency or the bank. In either case, a judgment will be preferred against you whether you appear in court or not. If the case goes to court, your debt may increase by court costs, lawyer’s fees and post judgment interest. After the judgment, your wage may be garnished; your bank accounts seized and other assets such as cars and houses encumbered.

You still have three options left even after the case goes to court. Remember, the first option was do nothing and that’s how you ended up in court in the first place. The second option is to settle the debts. If you have the means, you may offer your creditors a lump-sum payment to settle the debt. Usually, this is difficult to do since most debtors don’t have large sums of money to offer lump-sum settlement.

The third option is to do a proposal to your creditors where you ask your creditors to waive off a portion of the debt and interest so you can pay the balance on a monthly basis until the agreed amount is paid off in two to five years time.

The final option is to go bankrupt. What happens in a bankruptcy situation will be discussed in another article, but suffice it to say that whichever option you choose will depend largely on your own circumstances. It varies from one person to another.

What I know is that, some one introduced a family who owed $100,000 to me. They had gone to a big Proposal Administrator in the city to do a proposal to repay their debts. They reached an agreement to pay their creditors $1,000 a month for 60 months for a total of $60,000. I had the opportunity review the proposal for them and negotiated a lump-sum of $14,000 plus $250 a month for 24 months for a total of $20,000. The family was obviously thankful and happy.

If you are having debt problems, call me at 416-398-1877 ext 201.

I will help you face them squarely and resolve them for you.

Don’t face your debts alone.


Ken Ntiamoa, MBA

BIA Insolvency Counsellor