Consumer Proposals in Scarborough

 

Scarborough is a thriving multicultural hub that any Torontonian would be delighted to call home. With the hustle, bustle and amenities of a major conurbation ringed with stunning hiking trails, parks and beaches, it’s a veritable paradise. But living in this great city comes at a premium, and for many Canadians, household debt has become untenable. 

Household debt statistics across Canada are somewhat worrying. The average homeowner burdened with over $20,000 in non-mortgage debt. Torontonians, however, are way ahead of the curve. The average homeowner in Toronto is around $40,000 in debt. Their debt to income ratio has increased from 88% to a staggering 150% over the past 10 years.

In light of this, many of Scarborough’s citizens are struggling to get out from under the weight of their debts. But when saving and budgeting become unfeasible, their only option is to pile more debts on top of their existing liabilities in the form of cash advances and payday loans. As the interest piles up, households may find that they are insolvent. When this happens, a Consumer Proposal could be a viable alternative to bankruptcy and give them the financial fresh start they need…

What is a Consumer Proposal?

A Consumer Proposal is a debt relief plan designed to help Canadians who have significant debts from multiple creditors. It can provide debt relief to those who have exhausted other debt relief options such as a Debt Management Plan or Debt Consolidation. As long as your non-mortgage debts do not exceed $200,000 Consumer Proposals in Scarborough can be highly beneficial in helping you pay off your debts faster so you can live debt-free. You can find out more information about Consumer Proposals here.

How does it work?

You cannot approach your creditors for a Consumer Proposal directly. It needs to be done through a Licensed Insolvency Trustee. Click Here to find one near you. The Trustee will act as your Proposal Administrator. They will take a close look at your finances, your circumstances and your assets and help you to determine whether or not a Consumer Proposal would be more beneficial to you than filing for Personal Bankruptcy. If you choose to go ahead with a Consumer Proposal, they will help you to draft a proposal that will be agreeable to your creditors and manageable for you.

It’s important to note that not all of your creditors have to be amenable to the arrangement. If more than 50% of your creditors agree to the terms of the proposal, they will all be bound by it, whether they initially agreed to the terms or not. A Consumer Proposal is usually paid off over 3-5 years, and remains on your credit report for a further 3 years.

Benefits of a Consumer Proposal

Those not familiar with Consumer Proposals in Scarborough may wonder what benefits and advantages they have in comparison to other debt relief measures like filing for Personal Bankruptcy, getting a Debt Consolidation Loan or arranging a Debt Management Plan. Let’s take a look at some of the primary benefits of a Consumer Proposal before taking a look at how Consumer Proposals in Scarborough stack up against other debt relief options.

Your Licensed Trustee will always ensure that you know all of the options available to you, outline the pros and cons of each and help you to make the right informed choice for your household.

A Consumer Proposal comes with the following benefits…

Stop wasting money on interest

Did you know that the average Canadian household gives up over 7% of their disposable income to interest on their debts. That’s a lot of money that you’re just giving away every month. What’s more, if you’re only making the minimum monthly repayments on your credit cards, you may be paying off as little as $10 a month of the principal per card). If you have multiple debts outstanding to several creditors, you may find that the interest rates are increasingly difficult to keep track of. Because every debt has its own rate of interest, you may not know just how much money you’re wasting every month.

Consumer Proposals in Scarborough completely waive all interest payments as well as other fees. So you can focus on paying down your principal- the amount that you’ve actually borrowed.

Reduce your principal

There are lots of debt relief options that can help you to reduce your interest payments. But very few can actually reduce your principal debt. Under a Consumer Proposal, you can actually get a substantial amount of your debt forgiven. As much as 80%!

This means that you can get completely debt-free in a few short years rather than prolonging your debts for decades.

No more punitive measures

Your debts don’t just put a stranglehold on your household cash flow. They also weigh heavily on your mental health. Threatening letters, intrusive phone calls and punitive measures like wage garnishment and penalties can all add to the psychological effects of your debt.

A Consumer Proposal puts an instant end to wage garnishment and other draconian punitive measures.

Stop the payday loan cycle

When you have no option but to rely on payday loans, you’ll find that your debts get harder and harder to pay down as interest piles up. Scarborough Consumer Proposals help to make monthly repayments smaller and more manageable, so you can regain your disposable income, budget and save so that you’re less reliant on high-interest forms of credit going forward.

Get relief from government debts

There are some debts, like government debts, student loans that are over 7 years old and CRA debt, against which most debt relief options cannot be leveraged. A Consumer Proposal in Scarborough, however, can help you to write off a significant proportion of your government debts. 

Protect your assets

Some assets are protected in the event of Personal Bankruptcy. Many, however, are Non-Exempt, meaning that they will likely be lost. A Consumer Proposal, however, protects your assets while helping you to live a debt-free life faster. 

How is a Consumer Proposal different to a Debt Management Plan?

Although Scarborough Consumer Proposals are functionally similar to a Debt Management Plan, they benefit in a number of key ways.

A Debt Management Plan is a voluntary arrangement, meaning that creditors can, at least in theory, back out of the agreement at any time and for any reason. A Consumer Proposal, however, is legally enforceable. Even if 49% of your creditors did not agree to it. However, this is a double edged sword. If you fail to keep up the repayments under your Consumer Proposal and do not notify your creditors the agreement could be rendered null and void. 

Furthermore, a Debt Management Plan can only reduce your interest. It can never, ever reduce your principal debt. So you may find that you’re actually paying out more in monthly repayments under a Debt management Plan. 

Finally, Debt Management Plans are designed to relieve smaller debts (under $10,000) across a small number of creditors. If you owe significantly more than this to multiple creditors, a Debt Management Plan may not be adequate to meet your needs.

How is a Consumer Proposal different to Bankruptcy?

A Consumer Proposal typically means that you have to pay off more of your principal than if you were to declare Bankruptcy. However, for many it is a more effective and appropriate measure. 

Although you can theoretically get all of your debts forgiven when filing for Bankruptcy, this does not guarantee that all of your debts will be automatically discharged. If you fail to meet your obligations within the first 9 months of filing for Bankruptcy, your case may go to court, and your creditors will be given an opportunity to dispute the automatic discharge of your debts.

A Consumer Proposal allows you to keep non-exempt assets like your home (if you have more than $10,000 in equity), your vehicles and other assets like art, fine wine and designer clothing that may be lost if you are declared Bankrupt.

While Consumer Proposals do not include the Credit Counselling that comes with filing for Bankruptcy, it does not remain on your credit report as long. Bankruptcy stays on your credit report for 6 years if it’s your first and 14 years if it’s not.

How do I get started?

Consumer Proposals in Scarborough can set you on the path to a debt-free life. Bit it’s up to you to take that crucial first step. Our team can help to make taking that step easier by making you aware of all your available options and helping you to make the right informed choice for your household.

We can put you in touch with a Licensed Insolvency Trustee who can ensure that you get the help you need in escaping debt and living your best financial life. 

Want to know more? Call us today on (877)879-4770. We’ll be delighted to arrange a risk-free, zero-obligation and completely confidential callback.