If you are dealing with insurmountable levels of debt, you might think that bankruptcy is your only option.
Bankruptcy is basically a clean slate and once you are discharged you will be back to square one.
However, it’s certainly not without issues and you can end up losing a lot of your assets.
That’s why it’s worth being aware of the alternative in the form of a consumer proposal.
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Consumer Proposals Explained
As soon as you file a consumer proposal any debt collection processes must stop immediately.
If the majority of your creditors agree to the terms of the proposal then it will pass and all creditors will be required to abide by the conditions even if some did vote against it.
A consumer proposal will include an amount of the debt that you can afford to pay back and the time you will need to pay it back.
The rest of the debt will be wiped clean and once you complete your payment plan, you will be debt-free.
A crucial benefit is that you won’t have to worry about issues with losing your assets.
Unlike bankruptcy when you file a consumer proposal, your assets will remain in your control.
How Does This Benefit Your Creditors?
A licensed insolvency trustee will always ensure that a consumer proposal will provide more to creditors than they would receive with a bankruptcy.
This means that they have fewer reasons to potentially reject the consumer proposal which is why most are approved.
As such, creditors are incentivized to accept consumer proposals that are deemed to be fair.
You just need to make sure that you are being honest about what you can afford to pay back.
Benefits For You
We have already discussed some of the benefits of a consumer proposal but it is worth going through them all.
First, any legal action will cease completely once the proposal is approved.
This means that you don’t need to worry about issues like wage garnishments.
Perhaps more crucially, assuming you keep up with payments, you will be clear of your debt when the proposal ends.
You can also take a maximum of sixty months to pay off your debt which means that the monthly payments are often more than manageable.
Furthermore, you’ll always be paying less back to your creditors then you were originally dealing with.
As you can see, there are numerous benefits to a consumer proposal.
Particularly when compared to other debt-relief options.
However, you might still want to explore some more possibilities.
If that’s the case, then we recommend you contact us today.
A friendly member of our team will provide the support you need and ensure that you get all the information you need.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal