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In Over Your Head In Debt In Alberta? Consider These Three Bankruptcy Alternatives

Are you struggling in a sea of debt in Alberta, Canada? You're not alone. Economic times are tough, and it is easier than ever to find yourself unable to pay all of your bills. Your first inclination might be to go see a bankruptcy trustee about filing bankruptcy and getting your debts discharged.

While this is an excellent solution for many people, and may ultimately be the right one for you, you should know that it is not your only option in most cases. Remember, filing bankruptcy relieves the financial pressure, but it also puts a dent in your credit score for six to seven years on average.

Before you file for bankruptcy in Alberta, consider these three alternatives to help get you back on the right financial track:

1. Get Into a Debt Management Program

In a Debt Management Program, all of your unsecured debts are rolled into one monthly payment. You make this payment each month to a credit counseling agency, which then distributes the money among your creditors.

It is not a legally binding agreement, and in most cases, you must pay back the whole amount of debt. However, sometimes creditors will agree to a reduced repayment amount. Wage garnishments are usually not suspended when you use a Debt Management Program, and creditors can still contact you.

Your creditors all have to agree to participate in this program with you in order for you to qualify for it. Most will agree because it means they will definitely be getting paid something. The consolidation of your debts into one monthly payment usually makes repayment easier on you.

There is a time limit on paying back your debts under this program. They must be paid back within four years of starting the program in most cases. Occasionally, creditors will extend the repayment period to five years, depending on individual circumstances and situations.

2. Enroll in an Orderly Repayment of Debt Program

According to NoMoreDebts.org, this special bankruptcy alternative program is only available to residents of Alberta, Saskatchewan, and Nova Scotia. Being able to use this bankruptcy alternative is one of the benefits of living in Alberta.

In this program, you work through the bankruptcy courts to come to an agreement with your credit card companies to repay them on a set schedule. All of your credit card companies must agree to participate in the program with you to do this. Once they all agree, the interest rates on all of your credit cards are set at five percent, and stay that way until the debt is paid off.

This program is only for credit card debt, so only use it if your minimum monthly payments are more than you can afford without the program. The debt must be paid off within thee years, so you know you will be free of credit card debt in that time.

3. Work Out a Consumer Proposal

Consumer proposals are very similar to Debt Management Programs. The big difference is that instead of being a mostly informal agreement arranged through a consumer credit counseling organization, a consumer proposal is a formal legal agreement arranged by a bankruptcy trustee.

The proposal has to be agreed upon by both your creditors and the Office of the Superintendent of Bankruptcy in your area. You make your monthly payments to the bankruptcy trustee, who distributes the money to your creditors. Wage garnishments must stop when you use a Consumer Proposal, and creditors are not allowed to contact you.

As with a Debt Management Program, the debt you owe is may or may not be reduced. You must pay the reduced amount back within five years.


You don't necessarily have to declare bankruptcy in order to get out of debt in Alberta. You have other alternative options at your disposal. If you are not sure which option is right for you, or if bankruptcy is really your best choice, talk to one of Alberta's certified bankruptcy trustees at a place like Harris & Partners Inc. Do it today, and find out the best way for you to get out of debt quickly and with as little damage to your credit as possible.