Consumer Proposals in St. Catharines
For many in St. Catherines, Ontario and all over Canada, household debt is just another fact of life. However, while some are able to manage their debts and keep their debt-to-income ratios healthy, there are many who struggle to balance their household budgets and achieve financial wellbeing because of the weight of their debts.
Indeed, the average Canadian household is over $20,000 in the hole, with around 15% of their disposable income going towards monthly debt repayments. Of this, 7.1% is spent solely on interest. Over time, your debts may feel inescapable, with significant and lasting effects on your mental health, your personal wellbeing and even your relationship with your spouse. Furthermore, when you’re met with car trouble, a leaky roof or a broken oven, you may find that your only option is to pile new debt on top of your old debts.
And when this debt comes in the form of high-interest payday loans or cash advances on your credit card, that hole gets a few feet deeper. Could Consumer Proposals in St. Catherines be the answer to your prayers?
What is a Consumer Proposal?
A Consumer Proposal is a form of debt relief designed to help those who have exhausted other options such as Debt Consolidation Loans or Debt Management Plans (which may not be appropriate for your debts). A Consumer Proposal in St. Catherines may be suitable for those with multiple creditors whose debt-to-income ratios are so high that they can be considered insolvent.
Under a Consumer Proposal, you can get debt-free in as little as 3-5 years without spending another red cent on interest.
How do I set up a Consumer Proposal?
You won’t be able to set up a Consumer Proposal on your own. Unlike a Debt Management Plan, a Consumer Proposal needs to be set up by a Licensed Insolvency Trustee. These professionals are the only people who can advise you of all your available options and act as your Proposal Administrator if you decide that this is the best debt relief option for you.
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Your Proposal Administrator will look closely at your income, your circumstances, your debts and your assets to help you put together a proposal which will be satisfactory to your creditors without imperilling your personal finances. If a majority of 51% or more agrees to the terms of your proposal, all of your creditors are legally bound by them. Even if they didn’t initially vote in favour.
What are the biggest advantages of a Consumer Proposal?
If you are insolvent, you may assume that Personal Bankruptcy is your only option. However, there are a number of very good reasons why you may want to consider Consumer Proposals in St. Catherines as a viable alternative…
Forgives a portion of your debt
While Bankruptcy can forgive all of your principal debt, you need to jump through a lot of hoops in the first 9 months to achieve the automatic discharge that will keep your case out of Bankruptcy Court. Under a Consumer Proposal, however, you can reduce your principal debt significantly. As much as 80% may be forgiven. This may allow you to get free of your debt much faster. Especially considering…
Interest rates are reduced to 0%
For many household, debt is a slippery slope. One of the primary reasons for this is that interest rates can get out of control. Especially if you’re only making the minimum repayments on your credit card. You could be paying off as little as $10 a month of your principal with the rest of your repayments wasted on interest.
Under a Consumer Proposal, interest drops to 0% and any other charges are waived.
Get relief from government debts
If you owe money to the CRA or are struggling to repay a student loan that is over 7 years old, you’ll find that Debt Consolidation Loans and Debt Management Plans cannot be leveraged against these government debts. A Consumer Proposal, however, can be applied to them, and may even significantly reduce them.
Put a stop to wage garnishment
In most provinces, creditors can use wage garnishment as a punitive measure against debtors who struggle to make their repayments.
This means that they can petition the courts to extract repayments directly from your employer. If you’re self-employed or run your own business, they can even take payment directly from your clients or debtors. Which can potentially do damage to your professional reputation and your working relationship with them.
A Consumer Proposal puts an instant end to wage garnishment.
Save assets that would be lost in Bankruptcy
A Consumer Proposal is a great way to ensure that your creditors cannot access your assets, investments or recent contributions to your retirement savings. All of which may be lost when you file for Bankruptcy.
Help you to take control of your finances
St. Catherine’s Consumer Proposals help you to make better financial choices by easing the chokehold that debts place on your household cash flow. By making monthly repayments smaller and more manageable, you are left with more cash to put into your savings and investments. So you need never become reliant on credit again.
Is a Consumer Proposal the same as a Debt Management Plan?
While there are certainly similarities, Consumer Proposals in St. Catherines differ from Debt Management Plans in several key ways.
A Debt Management Plan is a voluntary arrangement. As such, a creditor can back out of it any time they feel that it no longer suits them leaving you with no legal recourse. A Consumer Proposal, on the other hand, is legally enforceable at both ends. Debt Management Plans also cannot be leveraged against government debt.
Finally, while you may be able to waive the interest you’re paying under a Debt Management plan, you will never be able to reduce the principal.
Still not sure? We’re here to help!
With so many debt relief options, it may be difficult to choose the best one for you. That’s where we come in. Unlike non-profit Credit Counselling services, we can show you all of the options available to you and help connect you with a trustworthy Licensed Insolvency Trustee to help facilitate them.
Want to know more? Get in touch today on (877)879-4770. We’ll be delighted to arrange a risk-free, zero-obligation and confidential callback.