When they arrange for a first consultation, most of our clients don’t realize that licensed insolvency trustees don’t just administer bankruptcies.
Our expert trustees can help with a variety of debt management and relief solutions.
One of those, the consumer proposal, is often misunderstood.
If you are unsure of what it can do for you, let us explain that our proposals enable you to obtain debt forgiven by almost 100% of your creditors.
Indeed, here’s a brief overview of what the consumer proposal does and how 99% of Bankruptcy Canada consumer proposals are accepted by creditors.
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What is the consumer proposal vs bankruptcy?
However, the process during which your debt is discharged is different.
First of all, only 10% of our clients are eligible to file bankruptcy.
On the other hand, many more can benefit from a consumer proposal to cancel their unsecured debts.
For debtors, the main difference lies in the cost of the debt relief plan.
When you file for personal bankruptcy, you may not have to pay more than the cost of bankruptcy, which is federally regulated.
However, with a consumer proposal, your trustee negotiates with your creditors to partially repay your debt.
Depending on the type of debt and its age, you can obtain up to 80% reduction on the amount you owe.
However, even if the debt is only partially repaid through a consumer proposal over the course of up to 5 years, it is fully forgiven at the end of the process.
How do you get a consumer proposal accepted?
The consumer proposal is a negotiation process.
The licensed insolvency trustee files the proposal on your behalf.
Your trustee assesses how much you can afford to pay to make an offer to your creditors.
Once the consumer proposal goes to the creditors, they will vote to accept or reject the payment offer.
As it is a legally binding process, it only requires over 50% of your creditors to agree to be approved.
Unlike other debt relief plans, such as a debt consolidation loan, if the proposal is turned down, the negotiation isn’t over.
Indeed, your trustee can amend the proposal to reflect on the creditors’ comments and expectations.
As a result, 99% of Bankruptcy Canada consumer proposals are accepted by creditors as filed or amended proposals.
Why are consumer proposals so effective?
Because proposals are regulated by federal law and managed by an accredited trustee, they carry a legal weight that can influence creditors.
In comparison, only 10% of debt settlement plans are successful.
Creditors are less likely to accept negotiation payment terms with debt settlement companies or credit counsellors.
At Bankruptcy Canada, we guarantee each of our clients an objective consultation with an experienced and compassionate trustee.
Our trustees understand the demands of creditors and how much debtors can afford to pay.
Therefore, we ensure that we produce consumer proposals that are fair for all parties.
We know that debts can be overwhelming.
That’s why we guarantee our clients that we will always recommend the best and most successful debt relief solutions for your situation.
Call us at (877) 879-4770 to find out how a consumer proposal can get rid of your debts.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal