Niagara Falls, ON Consumer Proposal Services

 

One of the best-known places in Canada, Niagara Falls has a thriving tourism industry. Routinely welcoming more than 30 million people per year, there are almost twice the number of tourism-related jobs in Niagara Falls than there are in the whole of Ontario. Despite this, local residents aren’t immune from the debt crisis that’s gripping the country.

As more Canadians experience spiralling debt problems, a significant number of people are considering filing for insolvency. Although bankruptcy remains a viable option for some, consumer proposals in Niagara Falls are becoming increasingly popular. Believed to overcome many of the disadvantages associated with bankruptcy, consumer proposals can be an effective way to resolve your debt problems.

 

What is a Consumer Proposal?

A consumer proposal is a formal agreement to repay your debts at a reduced amount. In fact, a consumer proposal can cut your total debt by up to 80%, so there is the potential to drastically reduce your liabilities.

However, you will need to be able to show that you’re unable to repay your debts in full before you can file a consumer proposal. Similarly, you’ll only be able to make consumer proposals in Niagara Falls if your total debt is less than $250,000 (excluding a mortgage on your home). In addition to this, you will need to be able to make a monthly payment towards the remainder of your debt.

Providing you meet these criteria, it’s highly likely you’ll be able to make a consumer proposal. To do so, you’ll need a licensed insolvency trustee (LIT) to act on your behalf. As consumer proposals and bankruptcy are governed by the Bankruptcy and Insolvency Act, individuals cannot file for either of these forms of insolvency alone. Instead, you’ll need a LIT to manage the process on your behalf.

Of course, you’ll be fully involved in drafting your consumer proposal and will take on an active role throughout the entire process. Furthermore, your licensed insolvency trustee will be able to answer any questions you may have and explain the terms of the proposal to you in detail before you decide to move forward.

Is a Consumer Proposal Better Than Bankruptcy?

Bankruptcy and consumer proposals are two very different things and one isn’t necessarily better than the other. However, many people believe that consumer proposals in Niagara Falls avoid many of the disadvantages associated with filing for bankruptcy. When compared to bankruptcy, the benefits of consumer proposals include:

Keeping your assets

When you file for bankruptcy, your non-exempt assets are transferred to your licensed insolvency trustee and they may be seized so that your creditors are paid some of what they are owed. With consumer proposals, however, you retain ownership of your assets at all times.

Avoid social stigma

Although there shouldn’t be any social stigma surrounding bankruptcy, many people feel embarrassed or ashamed about declaring themselves bankrupt. If this is a concern for you, you may feel more comfortable filing a consumer proposal instead.

No need to submit monthly income reports

Until a bankruptcy is discharged, you are required to submit income and expenditure documentation to your licensed insolvency trustee on a monthly basis. When you file a consumer proposal, however, this is rarely a requirement. Furthermore, an increase in your income or capital won’t affect your consumer proposal. In contrast, if your finances improve before your bankruptcy is discharged, the extra funds can be seized and distributed amongst your creditors.

Is a Consumer Proposal Right For You?

Everyone’s financial situation is unique, so there is no ‘one-size-fits-all’ solution when it comes to resolving debt problems. Before you can decide if a consumer proposal is the right course of action for you, it’s important to seek independent advice from a trusted source. As well as managing a consumer proposal, a licensed insolvency trustee is well-placed to help you find out more about alternative forms of debt management.

By discussing your financial circumstances with a LIT, you can find out everything you need to know about the debt options that are available to you. Your licensed insolvency trustee will tell you which debt relief options you’re eligible for, how each one works and what the long-term consequences are.

Once you have all the information you need, you’ll be able to decide how best to manage your debts and take a step closer to financial freedom. To talk to a licensed insolvency trustee in confidence, contact Bankruptcy Canada now.