Business Bankruptcy in Canada is primarily governed by the Bankruptcy and Insolvency Act (BIA), a…
If you’re experiencing financial difficulties and your debts seem to have no end in sight, it’s likely you’ve considered filing for bankruptcy.
Bankruptcy is a serious decision to undertake, but it isn’t always inevitable, or your only option.
For some hard-working Canadian debtors, a Consumer Proposal may be a better choice to get the debt relief they seek.
What is a Consumer Proposal?
A Consumer Proposal is a legally binding agreement negotiated by a Licensed Insolvency Trustee (on your behalf) with your creditors, to settle your total unsecured debts for less than you owe.
What are the benefits of a Consumer Proposal in Chatham, Ontario?
There are many advantages to filing for a Consumer Proposal over other debt relief options. These include:
#1. You get protection from your creditors.
As soon as you file a Consumer Proposal, your creditors will be stopped from trying to enforce collection efforts against you. This means your assets cannot be seized, any garnishments against you will cease, and you won’t receive any more calls from creditors or collections companies.
#2. You get to keep your assets.
Unlike in bankruptcy, you do not have to surrender your home – or other assets – as part of the proposal agreement.
#3. You will finally be able to make your monthly payments.
If your proposal is accepted, you will need to make only one, affordable monthly payment for the duration of the Consumer Proposal (which can last up to five years). That’s because a Consumer Proposal is designed specifically for you, and takes into account your current financial situation and your ability to repay. What’s more, you’re only obligated to repay a portion of your total unsecured debt. In some cases, you can reduce your total unsecured debt by up to 70%!
#4. Interest stops accumulating on your debt.
Once you file a Consumer Proposal, no further interest will be added to the debt you owe during the life of the proposal.
#5. You can avoid bankruptcy.
Bankruptcy is typically considered the last resort for debtors, and with good reason. It can affect your ability to obtain future credit or employment, and also bears a stigma that some debtors would prefer to avoid.
#6. You won’t need to pay any administrative or other fees.
A Consumer Proposal is typically the lowest cost debt relief option out there. The only payments you make will be the monthly payments to your Licensed Insolvency Trustee, who then repays your creditors according to the proposal.
#7. You’ll finally be on your way to eliminating your debt.
A Consumer Proposal is legal and binding, and does offer a final resolution to your debt, unlike other informal arrangements you may make with your creditors to repay. Plus, once your proposal has been accepted, your payments will not increase, even if your income increases – by way of a new job, raise, bonus, or other windfall. Unlike in a bankruptcy, you are able to keep this revenue.
Do you qualify for a Consumer Proposal in Chatham, Ontario?
You may be eligible for a Consumer Proposal if:
- You cannot afford to repay your unsecured creditors in full;
- You have debts over $1,000 but less than $250,000 (not including your home mortgage); and
- You have a steady source of income and can afford to make some payment each month.
How do I file a Consumer Proposal in Chatham, Ontario?
Every situation is unique, so the best way to figure out if a Consumer Proposal is really the right choice for you is to contact a Licensed Insolvency Trustee.
These are the only professionals authorized – and required – by the federal government in Canada to assist you with filing for insolvency, such as a Consumer Proposal or bankruptcy.
Contact a Licensed Insolvency Trustee today.
If you’re looking to finally get the debt relief you deserve, contact us today. At our initial, free consultation, we’ll review your financial situation and let you know the various debt relief options you have available to you, as well as their pros and cons. We’ll even give you our expert opinion on which solution may be best for you and your family.
And remember, the sooner you get professional help, the more options you may have available to you. Don’t wait to get started on the path to better financial health. Contact us today.
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