Eliminating Debt In Quebec

2014-09-29

Do you live in Quebec? Are you struggling with debt? The good news is, there are multiple options available to help you eliminate your debts, each of which has their own unique considerations and work best in varying situations. To learn more about your Quebec debt relief options and who they’re typically best suited to, read on.

Person on their laptop holding a credit card

Consumer Proposal

The Consumer Proposal is an offer that a debtor makes to its creditor under the Bankruptcy and Insolvency Act to pay a portion or all of your debts over a period not exceeding five years. The offer is made to all creditors and for it to be accepted, a majority in value of the voting creditors have to approve it. If a proposal is accepted than all the creditors (even the ones that voted against it) are bound by it. This option is becoming more and more popular because it provides additional flexibility and doesn’t affect your credit rating as much as other options. The Consumer Proposal is often used by debtors that have some assets they want to keep and by those concerned about their credit.

Bankruptcy

Bankruptcy is a process under the Bankruptcy and Insolvency Act that releases a debtor from most of their debts (see sect. 178). This process will also permit a licensed Trustee to seize and sell some of your assets (what you can keep varies by province – click here to see what you can hang onto in Quebec). Filing for bankruptcy will also stop all procedures against you and will not permit a creditor to file new procedures against an undischarged bankrupt. This option is often used by debtors will little or no assets and by people with lower income.

Consolidation Loan

A consolidation loan is a loan obtained to consolidate all of your debt into one single payment. The lender will provide the debtor a loan that will permit the payment of all of your debts. This loan will usually be at a lower interest rate than your other debts. This is often used by individuals with good credit and some income. The advantage to this option is that it will not affect your credit and it will reduce the monthly payments, making your debt much more manageable. If you’re struggling financially, a consolidation loan is one of the first options you should look into.

Voluntary Payment

Voluntary payment (sometimes known as Lacombe’s Law) is a process available exclusively in Quebec. This process permits you to make payments to the Court. The Court will take of dividing and distributing the monies between your creditors. This option is often used by debtors with smaller debts and with lower incomes.

There are many different options for debt relief in Quebec available to those with financial difficulties. Speak with an MNP Ltd. debt professional to determine which is the best option for your unique situation.