Kitchener, ON Consumer Proposal Services
Did you know that according to the latest research 1 in 3 Canadians have or will experience debt at some point in their life? It’s easy for debt to slowly build and accumulate over time. You might not even notice it happening. It can begin by buying on credit cards that you forget to pay off and soon you fall behind on more payments. You might borrow more to fix this and before long you could be thousands in debt.
At a certain point, you will realize that your current level of debt is impossible to pay off. This can be made worse by high levels of interest which causes your debt to build and build over time. What should you do when you find yourself in this situation? From debt settlement to debt consolidation, there are numerous options available to people struggling with their finances. However, one of the best possibilities is a Consumer Proposal.
Consumer Proposals in Kitchener provide a regulated way for people to gain debt relief that does promise a high success rate.
What Do You Need To Do?
If you are interested in exploring Consumer Proposals in Kitchener, your first step should always be to contact a Licensed Insolvency Trustee. These are the same professionals that administer bankruptcies but it’s important to be aware that a Consumer Proposal is not the same as this option.
Once you speak with your trustee, it is important to be honest about your situation. You need to make sure that you are being clear about your earnings, what you can afford, your assets and the level of unsecured debt that you are currently dealing with. Remember, a Consumer Proposal will not impact secured debts such as a mortgage. You will still need to pay these off.
A trustee will help you calculate the level of debt that you can afford to pay back and determine how long this should take you. The max period for a Consumer Proposal is sixty months in Kitchener. Once a proposal has been formulated, your trustee will present it to all your creditors. If the majority votes to approve the proposal it will pass.
It’s worth noting that as soon as you file a Consumer Proposal all debt collection processes must cease immediately. This is easily one of the greatest advantages of this option.
What If A Consumer Proposal Is Not Approved?
If the amount is fair and creditors stand to gain more from a Consumer Proposal in Kitchener than a bankruptcy, most will usually vote to approve it. It’s in their best interest to do so. However, if the Consumer Proposal is rejected, then you can enter into informal negotiations with creditors. The aim here will be to get them to agree to altered terms. If this fails, then it might be time to think about bankruptcy.
However, it’s worth noting that a Consumer Proposal will provide benefits over bankruptcy. With a Consumer Proposal, you will be able to maintain control of your assets. You will also find that payments are manageable because they can be completed over an extended period.
However, it is advised where possible you do attempt to complete the Consumer Proposal earlier than originally planned. This is often possible as your financial situation can change over time. If it does, it’s worth noting that the amount you owe will not increase. You will still only be responsible for paying the level of debt that you originally agreed with creditors. This can be as little as 20% of the debt that you originally owed.
Are There Any Other Alternatives?
Aside from Consumer Proposals, there are other alternatives for those seeking debt relief in Kitchener. This includes options such as debt consolidation and debt counselling. It’s worth noting that debt consolidation is based on eliminating the high-interest rates that you might be experiencing. However, typically the amount of debt that you owe remains the same with this choice. With a Consumer Proposal, it will decrease significantly.
If you would like to learn more about Consumer Proposals in Kitchener and assess whether this is the right choice for you, please make sure that you contact us today. A friendly member of our team will be happy to assist you. We have helped countless Canadians get their life back on track with the right level of debt relief and we are confident we can help you too.