If you are suffering from an insurmountable level of debt, then you might think that filing bankruptcy is your only option.
However, this is not the case.
There is another official possibility that is regulated by the government and that’s a consumer proposal.
A consumer proposal is essentially an offer that you make to your creditors.
You state the amount of debt that you can afford to pay off in exchange for eliminating the rest of the debt completely and you get a maximum of sixty months to complete the proposal.
As an added benefit, there is no interest and you are protected from debt collection action by creditors.
Once you explore a consumer proposal you’ll find that it’s a win for both you and your creditors why is this?
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Why Is It Beneficial To Creditors?
Ultimately, a consumer proposal will always be beneficial to creditors.
When you meet with your licensed insolvency trustee, you will discuss what you can afford to pay back.
They will base this on your assets as well as your current income.
A consumer proposal will always be based on giving more back to creditors then they would receive if you were declared insolvent and filed bankruptcy.
So, this is how they win but what about you?
Why Is It Beneficial To You?
A consumer proposal is beneficial to you because unlike in the case of bankruptcy, you actually get to maintain control of your assets.
In the case of bankruptcy, all your assets end up in a trust to pay back creditors as much as possible.
With a consumer proposal, you will decide what you sell-off and what you keep.
This means that you don’t have to worry about losing your house, your car, or any other assets that you have in your name.
At the same time, you are paying significantly less than the level of debt that you had previously accumulated.
Essentially, it’s a give and take relationship.
You, the debtor agrees to pay off as much of your debt as you can afford and your creditors agree to lose a portion of the profits that they are owed.
Once the consumer proposal is complete, you will be free from your debt and your creditors will have gained significantly more than they would have if you filed bankruptcy.
Get In Touch Now
We hope this helps you understand everything that you need to know about a consumer proposal and why it can be a win for both you and your creditors.
If you need more support then please don’t hesitate to contact us today.
You can call us on the phone or fill out a free evaluation online.
We have helped 100,000 Canadians escape debt and we’re confident that we can help you too.
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