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Are you so tired of debt that you’re considering filing a St. Thomas Consumer Proposal?

Maybe this is your first step toward finding someone to help you deal with your financial struggles. Or perhaps you’ve already exhausted other possibilities: You’ve taken out a consolidation loan or took on a second job to pay off debt. Yet nothing’s worked.

Whatever the case may be, it’s important to know what a Consumer Proposal is and how it might help you get rid of your debt.

What is a Consumer Proposal?

A Consumer Proposal is simply a deal that’s struck with your creditors whereby you agree to repay a portion of what you owe over a period of up to five years. This deal is legally binding – for both you and your creditors.

What debt does a Consumer Proposal cover?

Unsecured debts can be dealt with in a Consumer Proposal. This includes:

  • Credit card debt;
  • Payday loans;
  • Past due utilities;
  • Student loans over seven years old; and
  • Tax debts.

Why would a creditor agree to a proposal?

Just because you make a proposal to your creditors, doesn’t mean they have to accept it. So why would a creditor agree to a plan where you pay back less than what you actually owe them?

The reason is that most debtors filing a proposal simply can’t afford to repay their entire debt. And a creditor knows that they will get far more from you by way of a proposal than if you filed for bankruptcy, where they may recover nothing at all.

Why would a debtor want a Consumer Proposal?

Here are some reasons that a proposal could work to your benefit.

#1. You can keep your house.

If you can afford to pay at least some of what you owe your unsecured creditors, you might want to arrange to do so through a proposal. The alternative of filing for bankruptcy risks you possibly having to sell your home. The fact that you can keep your assets in a proposal makes it more desirable to some debtors.

#2. You can finally eliminate your unsecured debt.

If you’ve attempted to resolve your debt problems on your own (or sought help from others, such as credit counsellors or debt counsellors – without any luck) you can rest assured that a proposal will eliminate your unsecured debt once and for all. This is true, as long as you make your monthly payment and other obligations.

#3. You would likely have to repay only a portion of your debt.

In many cases, this can mean up to a 70% reduction in your debt. So if you have a lot of unsecured debt, what once seemed impossible to repay finally becomes manageable with a reduction of the amount owed and payment period of up to five years.

#4. You stop interest from accruing on your unsecured debt.

A proposal freezes the interest you pay right upon filing.

#5. You consolidate your unsecured debt into one monthly fixed fee – a fee that you can afford.

A proposal is a hybrid between loan consolidation and debt settlement. You see, you’re taking your unsecured debts and consolidating them into one monthly payment. That monthly payment will be affordable based on your current circumstances. (Your Licensed Insolvency Trustee will make sure of this when negotiating the proposal on your behalf.)

You’re also paying less than what you owe back – so that’s where it’s like a debt settlement.

The fact that the fee is consolidated means that you can focus on making that one payment back – instead of having to repay several creditors at a time.

It’s important to note that this monthly fee is also fixed. So if during your proposal you get a raise, a second job, or simply come into a windfall of money like a tax refund, you get to keep that excess. Contrast this with bankruptcy, where you need to report the surplus income and make extra payments into that bankruptcy.

#6. You get relief from your creditors.

A proposal is a legal process, and as such, you get protection from your creditors. Once you file, your creditors must stop any action against you, including:

  • Lawsuits;
  • Wage garnishments; and
  • Collection calls.

This gives you the time you need to put your financial affairs in order.

#7. The proposal binds your creditors.

Again, because a proposal is a legal process, your creditors can’t change their minds along the way and decide to come after you for the entire amount you owe.

#8. You can be debt-free within five years – or sooner.

If you happen to have extra money, you can pay it into the proposal and finish it faster.

#9. You get the fresh start you deserve.

Once you’ve got the monkey of unsecured debt off your back, you can finally start fresh and begin to rebuild your credit. You get a clean slate to start again. Isn’t it time that you had the opportunity to do just that?

Do I qualify for a Consumer Proposal?

A Consumer Proposal may not be right for everyone. There are some requirements you need to meet.

  • Do you owe debts that are greater than the value of assets you own?
  • Are you unable to pay your debts as they come due?
  • Do you have unsecured debt that does not exceed $250,000, excluding a mortgage?
  • Can you repay at least some of what you owe?
  • Are you a resident of Canada or do you own property in Canada? (You don’t have to be a Canadian citizen.)

A Licensed Insolvency Trustee can help you determine whether a proposal is right for you and your family.

How much does it cost?

Many debtors are concerned they’ll end up paying fees on their proposal. Those debtors that went to credit counsellors – particularly for-profit ones – may have had to pay these professionals sign-up fees and monthly percentages without ever having had their debts addressed.

When it comes to a proposal, you aren’t charged upfront. Your proposal is administered by a Licensed Insolvency Trustee (LIT). But your LIT is paid out of the monthly payments you make that would otherwise go to your creditors. So you do not actually pay anything for your proposal.

How do I file a St. Thomas Consumer Proposal?

In order to file a Consumer Proposal in St. Thomas or any other place in Canada, you require the assistance of a Licensed Insolvency Trustee (LIT).

LITs are:

  • Federally licensed and regulated.
  • Qualified professionals who have the education and credentials to assist you.
  • The only professionals in Canada authorized by the Canadian government to assist debtors with filing Consumer Proposals or bankruptcies.
  • Governed by strict ethical regulations when it comes to the debt services they provide, so you know they are working toward your best financial interests.
  • Able to provide you with counselling sessions – which, in fact, are mandatory if you file a proposal. This way, you can learn money management tips that will help you avoid dangerous debt in the future.
  • Can assist you with a full range of debt relief options – from simple budgeting assistance all the way to bankruptcy.

Contact a Licensed Insolvency Trustee Today

It doesn’t cost anything to pick up the phone and schedule an appointment with a Licensed Insolvency Trustee. As seasoned Licensed Insolvency Trustees, Adamson & Associates Inc. want to see you succeed in your mission to becoming debt-free.

At your free initial consultation, we will make a comprehensive review of your financial circumstances. Then, advise you of every debt relief option available to you, their pros and cons, and our advice as to which we believe is the best option for you and your family. So get started on the path to healthier financial living today.

We treat people with dignity and respect, and you will never be judged. If you wish to speak to someone in St Thomas who cares about your financial future, contact us at (519) 310. JOHN and let us help you with the answers your need.

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