Filing a Consumer Proposal in Ontario
Filing a consumer proposal is a viable way for people in Ontario, Canada, to get a solid handle on their debts and finally experience freedom from debilitating debts and hounding calls from creditors.
The number of people who had to file a consumer proposal was up 23% this year in comparison to last year.
It is often a better choice than filing for bankruptcy for many, but you need to know as much about it as possible first to be sure it’s the right choice for you.
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Is A Consumer Proposal The Right Choice For You?
Ontario residents who want a fresh financial start should consider this method of debt repayment.
A consumer proposal is a debt solution that provides all of the essential protections of a bankruptcy without the associated fees and time in court, making it a better, less stressful option for most people.
In a consumer proposal, residents will work with a licensed insolvency trustee to formulate a legal proposal designed to lower interest rates and settle debts for less than what you owe.
This is often a huge relief for those in debt, and is the best solution for those in Ontario who may have a high level of debt that they feel overwhelmed by.
What Happens When You Create A Consumer Proposal?
Once you’ve put your consumer proposal together in Ontario it will be sent to your unsecured creditors for their approval.
The proposal is binding for all of your creditors, and they must approve it if it is going to go ahead.
If 51% of your creditors accept the proposal, then it will go ahead and they will all have to adhere to it.
It’s important to note that you must include every creditor in the proposal, even any friends and family that you owe money to.
This is in your best interests, as this is the only way you will receive the help that you need.
The law states clearly that you must include all of your unsecured creditors in a consumer proposal.
If you’d rather not do this, there are other solutions, but you may still find yourself in financial difficulty afterwards.
How Much Debt Should You Have To File A Consumer Proposal?
A consumer proposal is best for those who have a high level of debt.
If you have $250,000 or more of consumer debt and an insufficient amount of assets to have a chance of paying it off, this will mean you likely qualify for a consumer proposal.
It’s a good idea to explore other options available to you if you owe less than $10,000.
What Are The Benefits Of A Consumer Proposal?
There are many advantages of consumer proposals for those in a high amount of debt.
This is acknowledged as an easier way to pay off your debt than having to pay numerous creditors separately, and you will no longer receive calls from bill collectors.
Bill collector calls can be stressful and anxiety inducing, but they will stop entirely when you create an approved consumer proposal.
A consumer proposal also protects your assets, so you can have peace of mind if you own a house and do not want to give it up.
The convenience of the consumer proposal is an advantage, too; it consolidates your debts and you simply pay it off through an insolvency trustee via a monthly payment plan or with one lump sum if possible.
As you have options, people usually find they are able to pay off their debts and get a fresh start.
Is This The Same As Bankruptcy?
Filing a consumer proposal is not the same as filing for bankruptcy – but it will impact your credit score in a similar way.
You’ll need to carefully consider how this will impact your personal credit score and your future before going ahead – your credit report will reflect your consumer proposal for three years after you complete it.
If you think you may want to take out a new line of credit in the future, such as a credit card, car loan, or even a phone contract, you’ll need to weigh this up carefully.
We can advise you on the best course of action to take if you’re unsure as to whether this is the right decision for you.
When exploring debt relief options, a consumer proposal should be at the top of your list.
As a legally binding proposal between you and your creditors to deal with unsecured debts, a proposal can help you become debt free and stop collection calls and wage garnishments.
In order to file the proposal you must work with a licensed insolvency trustee acting as your proposal administrator.
Since it is a legal process you will receive protection from your creditors and will be able to eliminate all of your total unsecured debts.
You cannot changed secured agreements in a consumer proposal.
Consumer Proposals in Ontario
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