Consumer Proposals in Windsor
With more than 2 million jobs being lost across the country, Windsor has one of the highest spikes in unemployment. As more people are let go, made redundant or experiencing wage cuts, they become increasingly reliant on credit. Of course, using credit to fund day-to-day living expenses rarely has a positive outcome. In many instances, high interest rates and rising costs mean people’s debt burden spirals out of control.
If your source of income has been lost or your wages are significantly less than they used to be, you may already be experiencing financial difficulties. If your debts have become unmanageable, you may want to find out more about consumer proposals in Windsor. As a way to reduce your debt and reset your finances, a consumer proposal can be a step towards financial freedom.
Can You File a Consumer Proposal?
If your total debts amount to less than $250,000 (excluding a mortgage on your residence), you could be eligible to file a consumer proposal. However, you will need to be able to make monthly payments as part of the proposal process, so you’ll need some form of income or savings to facilitate this. Furthermore, you’ll need to be able to show that you’re unable to repay your debts in full, rather than simply being unwilling to do so.
Although many people file individual consumer proposals, couples can file a joint consumer proposal if they meet the relevant criteria. To facilitate this, the limit is increased to total debts of no more than $500,000 (excluding a mortgage on your home).
If you think you’re eligible to file a consumer proposal, it’s certainly worth finding out more about this form of debt resolution. Even if you’re unable about your suitability as a candidate, it’s well worth seeking debt advice. By discussing your situation with a trusted advisor or a reputable licensed insolvency trustee (LIT), you can learn more about the various debt solutions available to you and decide which one is most suited to your needs.
What’s the Difference Between Bankruptcy and Consumer Proposals in Windsor?
Bankruptcy and consumer proposals are both governed by the Bankruptcy and Insolvency Act and they are both forms of insolvency. In addition to this, filing consumer proposals in Windsor or filing for bankruptcy must be managed by a licensed insolvency trustee, rather than the debtor themselves.
Despite these similarities, bankruptcy and a consumer proposal are two distinct entities. While a bankruptcy effectively eliminates your debts, a consumer proposal can be used to reduce them. Although a consumer proposal in Windsor can reduce your debts by around 70%, you will still need to repay some of the outstanding amount owed.
At first glance, then, it might seem like bankruptcy is a better option. However, there are many benefits associated with consumer proposals in Windsor, particularly in comparison to filing for bankruptcy. These include:<
Retaining your assets
When you file for bankruptcy, ownership of your non-exempt assets is transferred to your LIT and they may then be seized to offset some of your debts. With consumer proposals, you retain ownership of all of your assets.
No income surplus
During the course of your bankruptcy, any increase in income or capital will be assessed carefully. Typically, the funds will be seized and used to pay your creditors. If you make a consumer proposal, however, the amount you pay back will remain the same each month, regardless of whether your income increases.
Being declared bankrupt affects your professional freedom. You cannot act as a company director until your bankruptcy is discharged, which could affect your current or future employment options. Filing a consumer proposal avoids this disadvantage and enables you to retain your professional standing.
Is a Consumer Proposal Right For You?
Although you might be eligible to make a consumer proposal, it’s still important to assess all of the options available to you. With so many different types of debt solutions out there, you’ll want to consider the ramifications and consequences of each form of debt management before you move forward.
Although there are many benefits associated with consumer proposals, they are a form of insolvency and should, therefore, be carefully considered. A consumer proposal can last for a maximum of five years but will stay on your credit file for three years following completion, so it could impact your ability to access credit for a considerable period of time.
To discuss your situation with a licensed insolvency trustee, get in touch with us today. Simply call Bankruptcy Canada at (888) 823-8239 and we’ll provide all the information, support and guidance you need.