If you’re struggling with your finances, the idea of filing bankruptcy and consumer proposals in Windsor may seem frightening.
We see this in our offices every day.
Apart from just fear of the unknown, debtors are most concerned about:
- the negative effect insolvency will have on their credit score;
- whether they’ll be able to secure financing in the future; and
- the social stigma – deserved or not – attached to filing.
But what many hard-working Canadian debtors don’t understand is that these methods of debt relief are just that…
A way for debtors who find themselves in over their heads to get relief and start over with a clean financial slate.
So what exactly are bankruptcy and consumer proposals?
Put simply, in both cases, you are asking for help from your creditors to repay what you owe. In a consumer proposal, you make an offer to your creditors to pay back a percentage of your debt within up to five years. In bankruptcy, you are enrolled in a plan that works for you and your creditors to repay only a portion of your debts.
Basically, these two processes offer a way out for those debtors who cannot repay their unsecured creditors in full.
And while many people talk about the negatives of bankruptcy and consumer proposals, there are certain advantages as well.
Below are 7 reasons you might want to consider in filing bankruptcy and consumer proposals in Windsor.
#1. You stop all collection action against you.
Consumer proposals and bankruptcies are legal processes in Canada. This means that the moment you file, you get legal protection from your creditors. There will be no more collection calls, wage garnishments, lawsuits, or any other collection efforts against you. The rationale behind this is to give you the chance to breathe and get your finances in order.
#2. You stop accumulating interest on your debt.
Once you file a Windsor bankruptcy or consumer proposal, Interest stops accruing on your debt. What’s more, there will be no further interest added during the life of the bankruptcy or proposal.
#3. You will repay only a portion of what you owe.
Bankruptcies and consumer proposals were designed for debtors who are unable to repay their debts in full. As such, you can expect to shave off as much as 70% of the debt you owe when you file. The actual amount you end up repaying will depend on your particular financial circumstances.
#4. Your monthly payment will be a manageable one.
As part of your bankruptcy or consumer proposal, you will be required to make one single payment every month for a period of between 3 to 5 years. You can rest assured that it will be something you can afford because payments are calculated on your ability to pay.
#5. You can finally say good riddance to your unsecured debt.
Most debt relief methods are voluntary, which means your creditors need to opt-in. Furthermore, creditors may change their mind at any time to pursue an action against you for full recovery of the debt. Only bankruptcy and consumer proposals offer you legal protection from your creditors. If you carry out the duties and obligations required of you in these processes, you will be able to completely extinguish the unsecured debts that are covered in the filing.
#6. You gain invaluable knowledge to help you manage your finances.
Once you’ve eliminated your unsecured debt, your next primary goal is to avoid falling back into a dangerous financial position in the future. Money troubles can hit any of us at any time. As part of your Windsor bankruptcy or a consumer proposal, you will be required to attend financial counselling sessions. The goal of these sessions is to arm you with the tools and knowledge you need to help you make better financial choices moving forward. These sessions take place with a Licensed Insolvency Trustee (LIT). LITs are arguably the best financial advisors in the nation.
#7. It’s a relatively simple process – one you won’t have to go through alone.
While there are requirements you will need to fulfill when you file a Windsor bankruptcy or consumer proposal, your Licensed Insolvency Trustee will be there with you every step of the way. With your help, your LIT will negotiate with your creditors on your behalf, fill out the requisite paperwork, file the paperwork, provide you with counselling sessions, and so on… You get the idea. You won’t have to do this alone.
So when does it make sense to file a bankruptcy or consumer proposal?
Bankruptcies and consumer proposals are considered a debtor’s last resort.
But every financial situation is unique.
If you’re experiencing financial distress and aren’t sure where to begin…
Your best first step is to contact a Licensed Insolvency Trustee. Here’s why:
- LITs are the only professionals authorized – and required – by the Canadian government to assist debtors with filing for bankruptcy or consumer proposals.
- LITs are able to assist with the full range of debt relief options, from simple budgeting to loan consolidation to insolvency.
- LITs are federally-regulated and licensed.
- LITs have the requisite education and credentials when it comes to advising you about debt relief.
- LITs must adhere to strict ethical rules and regulations in the provision of debt services so you can be sure you’re receiving advice that will help you with your debt situation.
- Seasoned LITs have “seen it all” and assisted thousands of Canadians to get out of debt.
Contact a Licensed Insolvency Trustee Today
If you’re considering filing a Windsor bankruptcy or consumer proposal and want to learn more, contact our offices today. There are requirements to be eligible to file. We’ll review your financial situation and advise you on all debt relief options that are available to you. We’ll also give you our opinion on the best choice for you and your family. So give us a call today. The sooner you do, the more options you may have available to you.