Are you struggling to make ends meet every month?
Has living with debt become your norm?
There are debt relief options available that can help to eliminate your debt once and for all – so you can get the fresh start you deserve.
And if you are considering insolvency, depending on your circumstances, a consumer proposal may be the perfect solution.
What is a consumer proposal?
A consumer proposal is a legal process wherein an offer is made to your creditors to pay back a percentage of what you owe within five years’ time.
What are the advantages of a consumer proposal?
The number of consumer proposal filings in Canada is steadily growing. According to the Office of the Superintendent of Bankruptcy, consumer proposals have increased by 2.8% over the last year, while bankruptcies decreased a whopping 8.5%.
So why were over half of all consumer insolvencies filed in 2017 as proposals?
8 Good Reasons
#1. You stop all collection action by your creditors.
Unlike with other debt solutions, such as credit counselling and debt consolidation, consumer proposals are a legal process in Canada. So as soon as you file a consumer proposal, you receive protection from your creditors. This puts an end to the collection calls and most wage garnishments, lawsuits, and other collection efforts against you.
#2. You avoid bankruptcy.
A consumer proposal offers you a way to finally eliminate your debt and get legal protection – without having to file for bankruptcy.
#3. You get to keep your home, car, and all other assets.
With a consumer proposal you are making an offer to settle your debts, usually a monthly payment, and this offer is an alternative to selling your assets to try and settle your debts with creditors.
#4. You pay back less than what you owe.
Contrast this with debt consolidation loans or other debt management solutions, where you repay the full debt plus interest. In a consumer proposal, you repay only a portion of your debt. In some cases you may be able to cut your debt down by as much as 70% to 85%.
#5. You stop accumulating interest.
Once you file your proposal, Interest stops accruing on your unsecured debt. And there’s no interest added to your monthly payment during your consumer proposal.
#6. You’ll have a single, affordable monthly payment.
Consumer proposals are designed based on your ability to pay and the timing of your income. The result will be one monthly payment over a period of 3 to 5 years that you can manage.
#7. It’s a relatively simple process.
Unlike in bankruptcy, you won’t be required to appear in court or make any monthly reports. You also don’t need to advise of changes to your income (since you get to keep any increase in income or windfalls that come your way). Instead, you submit your proposal to your creditors who have 45 days to accept, decline, or ask for a meeting of creditors.
#8. You can finally get rid of your debt.
The biggest advantage of proceeding with insolvency, such as bankruptcy or a consumer proposal, is that – provided you meet all your obligations – you can finally achieve debt relief. And that’s because of the legal protection a consumer proposal offers. Once your proposal is accepted by your creditors, they can’t change their minds and take you to court to recover the full debt.
How do I file a consumer proposal in New Brunswick?
Every financial situation is unique. There are requirements to be eligible to file a consumer proposal.
Your first step is to contact a Licensed Insolvency Trustee.
These federally-regulated, licensed professionals are the only ones authorized by the Canadian government to assist debtors like you with filing for insolvency.
But that’s not all. Licensed Insolvency Trustees offer a full range of debt relief services.
At your initial, free consultation, your Licensed Insolvency Trustee will evaluate your financial situation and advise you of all debt relief options available to you. You’ll also get to listen to their seasoned advice on the best solution for you and your family.
Contact a Licensed Insolvency Trustee Today
If you want to know whether a consumer proposal is the right choice for you, schedule your initial, free consultation today. The sooner you do, the more debt relief options you may have available to you. Let us help you get back on the road to better financial health today.
Photo by Pixabay