Consumer Proposal in Windsor, ON

The consumer proposal in Windsor is a formal debt relief solution governed by the Canadian government through the Bankruptcy & Insolvency Act (The "Act") that provides similar creditor protections as a bankruptcy without some of the drawbacks of filing bankruptcy.

In a consumer debt proposal, residents work with a local Licensed Insolvency Trustee to work out a legal proposal repayment plan.

The consumer proposal allows you to eliminate interest charges on your unsecured debts (secured debt such as your home mortgage can't be included in your consumer proposal plan) and settle your debts for less than the total amount you owe.

Once you and your Trustee (who is known as a consumer proposal administrator in this legal process) work out a fair repayment proposal, your Trustee will send the consumer proposal to your creditors for approval.

While your proposal must be voted on by your creditors as to whether to accept it or not, in most cases your creditors will accept it as they will be better off if you make a consumer proposal than if you go bankrupt.

The proposal becomes legally binding if the creditors holding a majority of your debt (51%) vote to accept your proposal repayment plan.

A consumer proposal is an attractive alternative to personal bankruptcy for debtors who have a high level of debt, a solid income to make an attractive proposal to creditors, and valuable assets they wish to protect.

Debtors that owe up to $250,000 in consumer debt will likely qualify for a consumer proposal, although other possibilities like personal bankruptcy could work in some situations.

A married couple in debt who wish to pursue a consumer proposal can have up to $500,000 in consumer debt.

What are the Advantages of a Consumer Proposal in Windsor?

The main benefit of a consumer proposal is that it gives debtors with a high level of consumer debt an easy way to get out of debt.

However, there are many other benefits for Windsor consumers in filing a consumer proposal:

• Convenience - When you make a consumer proposal with your creditors you will work with a Licensed Insolvency Trustee (LIT) who will work with your creditors on your behalf.

Additionally, you will only have to make 1 debt payment to your Trustee who will distribute it out to all of your creditors.

• Asset Protection - When you file a consumer proposal, you won't lose any of your assets and it will make paying on your secured debts easier so you can keep your home and car, regardless of the level of equity you have in each.

Additionally, you won't have to deal with any collection calls, wage garnishments or frozen bank accounts.

There are also some disadvantages of a consumer proposal you should be aware of, such as:

• Credit use - When you file a consumer proposal you will lose access to credit for a short period of time. However, most creditors looking for debt relief through a consumer proposal already have poor credit and difficulties in accessing future credit.

• Loss of Repayment plan - If you miss three payments in your proposal it will be cancelled and all of your debts will be reinstated. While this is rare, it should be noted.

Do You Think a Consumer Proposal Could Be For You?

Please call us today to learn more about consumer proposals, personal bankruptcy and other ways to get out of debt with the help of a LIT in Windsor.