Bankruptcy or Credit Counselling: What’s Your Best Option

August 2nd, 2021
Bankruptcy or Credit Counselling: What’s Your Best Option

Financial hurdles and hardships are something many people, and really anyone for that matter,  can find themselves dealing with in their lives. Unless you are fortunate enough to be independently wealthy, have the benefit of generational wealth or have large assets, debt issues and financial constraints can impact anyone, especially given the current economic difficulties during the COVID-19 pandemic.

But while some manage their financial difficulties better than others, many people find themselves going back and forth between options and solutions to find a way past their final problems.  For many people, they are unable to recover financially on their own and are often struggling in silence not knowing where to turn for help.

Since you are reading this, the odds are you may have been impacted negatively financially at some point in your life and maybe you haven’t been able to recover yet and are looking for help. Here are some things that you might want to consider or at least be aware of:

What Is Bankruptcy?

Declaring bankruptcy is a legal process that someone or a business takes to resolve their financial difficulties and outstanding debts by giving up assets to creditors that are not protected or exempt. I know it sounds scary, but you should know that many assets are protected and don’t have to be surrendered or sold. If you have been struggling financially for an extended period of time, bankruptcy can definitely provide relief and a fresh start and may be the best solution to dealing with your debt after years of trying to stay afloat.

When you file for bankruptcy, creditors are notified immediately and phone calls, collection efforts and wage garnishments must stop. On the surface, this may sound like the best (or only) option. But bankruptcy may not always be the best option if you have large assets that aren’t protected. In that scenario, a bankruptcy might not be necessary and a proposal or consumer proposal may allow for better payment arrangement or allow you to maintain control of your assets.

Remember, bankruptcy isn’t the only option. For some people the solution to their debt problem  can be found through consumer proposals, proposals and credit counselling. We discuss proposals and consumer proposals in other blog posts, but let’s explore credit counselling.

What Is Credit Counselling?

Credit counselling is a process where a professional will guide you through your options to get out of debt without filing for bankruptcy or filing a proposal or a consumer proposal. There are numerous strategies to get out of financial trouble that an experienced credit counsellor can assist you with that you may not be able to figure out on your own.

Credit counsellors can provide you with options, help manage your debt, create budgeting strategies, and more. And unlike declaring bankruptcy, filing a proposal or a consumer proposal, credit counselling strategies aren’t formal insolvency events.   Sometimes this is the first step to explore and see if it is possible to get out of debt without doing something formal.

What Should You Do?

When there’s a leak under the sink, a plumber would assess the situation, find the leak and try to identify several ways to stop it, such as patch it up or tighten some crews. There might be solutions that don’t require larger fixes. However, when appropriate, they might also recommend fixing your entire plumbing system if it is the most appropriate solution to solve your problem.  It really depends on what solution works best for the current situation.  The same principle applies for anyone in financial trouble.

Credit counselling, a proposal or a consumer proposal might also be practical solutions to fixing your financial issues. However, bankruptcy may be the most appropriate and practical way to get your fresh start that you have been hoping for. It is always important to meet with a professional, especially a Licensed Insolvency trustee, to determine the pros and cons of all of your options that are available to you.


Many people find themselves in debt and in financial trouble that they never anticipated experiencing. While it is normal to be stressed, frustrated and even upset with yourself and perhaps feel a bit of shame, it does not mean that this has to be your reality for the rest of your life.

Regardless of your situation, consulting with a professional is your smartest move in order to help you with the process so you can finally get that fresh start you need.

If you’re experiencing financial difficulties and need professional bankruptcy help in London, consult Paul J. Pickering and Associates Limited. We understand financial hardship and we’re here to help you get through it.  Our office can help you with debt counselling, debt management, consumer proposals, proposals and bankruptcies. Contact us today for more information on how we can help.