When it comes to resolving debt problems, one of the most popular options is to opt for a Consumer Proposal.
It’s a legally-binding process that gets administered by a Licensed Insolvency Trustee, also known as a “LIT.”
Of course, it’s not a process that should be chosen to resolve your debt problems without first getting proper professional advice on the matter.
If you do decide to go ahead with a consumer proposal, does it change your life in any way?
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It puts the brakes on debt collection calls
Once the process begins, they have 45 days to accept or object to your proposal.
During that time, they cannot legally chase you for your debts.
That also means wage garnishments cease.
And they’re not allowed to keep charging interest on the debt that you owe.
Once all creditors are in agreement, you still don’t have to worry about debt collection calls and mail, or additional interest being added to your balances.
Your credit card debt won’t keep increasing
Are you worried about the balances of your credit card accounts getting bigger?
When you have an agreed consumer proposal organized, those balances get frozen.
Plus, the nature of consumer proposals means you only pay back a percentage of the balances.
At the end of your agreed term, the credit card companies will close your accounts even though you’ve only paid a percentage of them off.
Consumer proposals are legally binding, and so credit card firms can’t force you to pay any extra amounts.
You’ll stay on track with a consumer proposal
Some people worry that they could potentially default on their consumer proposal.
The truth is, consumer proposals only get put forward to creditors if they are affordable to the proposers.
In other words, you won’t get forced into agreeing on a consumer proposal if the likelihood is high that you can’t afford the payments.
Part of a LIT’s job is to double-check affordability before submitting any consumer proposals to creditors.
Your home doesn’t get used as collateral
One of the many advantages to consumer proposals is your home doesn’t get considered as part of the debt relief process like it might in bankruptcy.
What that means for you is your home will still be your home and you won’t get forced to move out of it.
And when it comes to mortgage renewal, there shouldn’t be any problems assuming you’ve kept up your repayments and can prove you’re still able to afford to pay it.
Next steps
If you’d like to move forward with setting up a consumer proposal, contact the friendly team at Bankruptcy Canada today on (877) 879-4770.
We’re here for you 24 hours a day, and all calls are confidential and risk-free.
What’s more, you’re under no obligation to take up a consumer proposal through us.
Our experts are happy to discuss your financial situation and help you find a solution to it.
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
