Consumer proposals are the only government approved debt settlement program in Canada. 60% of Ontarians choose a consumer proposal as an alternative to filing for bankruptcy.
A consumer proposal has multiple advantages over bankruptcy:
If you have an honest desire to repay what’s possible given your circumstances, a consumer proposal is a great option to consider. Being an alternative to bankruptcy, a consumer proposal helps you avoid it.
If you choose a consumer proposal, know that all your assets are protected.
Fixed payments ensure that, should your income increase over the course of your settlement, your payments won’t. If you were to declare bankruptcy, you would pay more as you continue earning more.
When it comes to a consumer proposal, you only repay a portion of your debt. Your debt may be reduced by as much as 70%, should you choose this option. As well as this, the interest you’ve been accumulating on your debt is halted, resulting in further savings.
As a consumer proposal is a legally binding settlement that has been agreed upon by the majority of your creditors, you are protected from harassing phone calls, wage garnishments, or legal threats.
It’s important to note that a consumer proposal is not always the right option for everyone. A consumer proposal does take more time to complete than if you were to declare bankruptcy. As your payments are lower than other options, the sum of the payments in their entirety takes longer to pay off. This being said, if your income were to increase during the course of your payments, your payments will not increase, allowing you an opportunity to pay off the proposal early. If you don’t have any assets that need protecting, a consumer proposal may not be the right choice . Filing a consumer proposal does affect your credit rating, similar to most alternative options. The effect that a consumer proposal has on your credit rating would be similar impact to that of a debt management plan. Lastly, an R7 note will remain on your credit report for three years following the completion of your proposal.
Who to Talk to About Filing a Consumer Proposal
If you’re considering declaring bankruptcy or filing a consumer proposal, ensure that you meet with a Licensed Insolvency Trustee, like Doyle Salewski Inc. Only an LIT can file a consumer proposal for you, so be sure to meet with one to discuss your options, including the filing of a consumer proposal. A consumer proposal can only be filed in person. take care to avoid any individuals or debt management organizations that refuse to meet with you in person and/or ask for money up front. You do not need to pay a debt consultant to file a proposal for you, and creditors often trust these organizations less than a Licensed Insolvency Trustee. Meet with us to find out if a consumer proposal might be the way towards improving your financial situation.
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