Is a trustee your best bet when bankruptcy is looming?

Many things can cause financial distress. If you can't make ends meet and stay up all night worrying, it's time to take action. Is a trustee your best bet?

The first step would be to make an appointment with a trustee in bankruptcy. As debt experts, trustees can guide you towards the solution that best applies to your personal situation. Are you embarrassed about discussing your money problems with a perfect stranger? Does bankruptcy frighten you? Take a breath and make sure you have all the right information:

• First of all, tell yourself that this “stranger” is a financial reorganization professional who will direct you towards a new beginning. You’re not the first person (and certainly not the last) to ask for help. There are several other solutions available before you need to resort to theBankruptcyand Insolvency Act.

People often get deeply into debt because they don’t have a personal or family budget. What are your monthly revenues and expenses? Do you know? If you haven’t set up a budget, or if you are unable to balance it, the trustee in bankruptcy will take the time to go over it with you.

• Once you understand why you are in debt, simply establishing a budget might allow you to take control of your finances.

If you hold a stable job and your debt rate is not overly high, the trustee may suggest debt consolidation, which you can get through a financial institution. This solution is a great way to simplify the management of your finances (one lender, one payment) and the interest rate payed is usually lower than what is charged by your current creditors.

• With a consolidation loan, your debt will become easier to bear. It is possible to begin the process for a debt consolidation with the financial institution of your choice, without having to go through the office of a trustee in bankruptcy. However, you should know that every request for a debt consolidation is entered in your credit file.

There are some other debt solutions you can look into:

• Try negotiating a lower interest rate with the creditors.
• Work with a trustee in bankruptcy to develop a consumer proposal. With this, the debtors agree that you can repay a certain percentage of your debt or pay them back over a longer period of time.
• File for bankruptcy.

In any situation, a trustee in bankruptcy will help you make the best decision. And should bankruptcy be unavoidable, the trustee will see to it that all your rights are respected.

If you have trouble managing your money, consider speaking with a financial advisor at your financial institution. He or she will be able to recommend some strategies and tools for managing your money in a better way.