Business Bankruptcy in Canada is primarily governed by the Bankruptcy and Insolvency Act (BIA), a…
Debt is becoming an increasingly tricky problem for many people in Ontario. It’s easy to accumulate – not so easy to get rid of.
You may have reached this page because you think that personal bankruptcy might be the only way out.
Here are five reasons why a Consumer Proposal might be a good solution for your debt situation.
#1: You get to keep all your assets
Once a Consumer Proposal is set up, you receive legal protection from your creditors. This means, for instance, that any wage garnishments cease.
Your creditors cannot go after your assets. In fact your life is relatively unaffected by the proposal.
#2: Payments are designed to be manageable – no interest is added to the amount repaid
Consumer proposals are designed around your ability to repay debt. Legislation exists in Ontario to enable you to repay only a % of your unsecured debt.
#3: A Consumer Proposal in Ontario is cheaper than bankruptcy
There are no direct fees for a Consumer Proposal made in Ontario. The Licensed Insolvency Trustee gets paid for their help but you won’t pay fees for consultancy, or administration.
#4: Arranging a Consumer Proposal is a lot simpler than filing for personal bankruptcy
Compared to bankruptcy setting up a Consumer Proposal is relatively simple.
It is unlikely that you will have to attend court and unlike a bankruptcy, there are no monthly reports to file.
Usually it only takes 45 days to get a Consumer Proposal approved by creditors and you are protected during this time from creditor proceedings. As long as you make your payments on time, you will never hear from your creditors or Trustee – life goes on as normal.
#5: Your financial life is basically unaffected
A Consumer Proposal is legally binding. Creditors are bound by law to not demand more money than is agreed in the proposal.
If your financial circumstances change during the proposal and perhaps your income increases, you get to keep the extra cash.
Another advantage of a Consumer Proposal is that your credit rating is not as deeply affected as it would be by a bankruptcy.
A proposal shows up on your credit report for only three years after completion whereas a bankruptcy continues to appear for six years after it has been completed.
What to Do Now
If you owe less than $250,000 and considering a bankruptcy, it’s worth your while to stop and consider viable alternatives.
So now you know that life doesn’t come to a grinding halt because of unmanageable debt. Help is potentially close at hand. A Consumer Proposal can only be arranged with the assistance of a Licensed Insolvency Trustees (LIT). So it pays to speak to an LIT first.
Adamson and Associates have helped thousands of people in Ontario resolve their debt problems. We can help you too. Call us today for a free no-obligation consultation.