Too much debt is a common problem in Nova Scotia. Many borrow to cover their living expenses because of the increased cost of living and higher interest rates. If you’re in this situation, debt repayment may have become more than you can handle. Ads like “Consumer Proposal Nova Scotia” or “Debt Consolidation Nova Scotia” promise debt help. So, you may be wondering if these debt solutions can help you. Let’s look at Consumer Proposals and how they can offer a solution to your debt!
What are Consumer Proposals?
A Consumer Proposal is an approved government debt-relief program that aims to restructure debt. Restructuring debt should help you repay some or all of your debt with less financial stress. Consumer proposals are available across Canada.
Consumer Proposal Nova Scotia
If you need debt help, you are not alone. In the third quarter of 2023, the average debt in Nova Scotia, excluding mortgages, was $20,352. Delinquencies have increased by a little over 19% since the third quarter of 2022.
Managing a heavy debt load can be incredibly stressful, but a Consumer Proposal in Nova Scotia could be the answer you’re looking for. It offers a path to relief from the overwhelming burden of debt. There are numerous benefits and a few drawbacks to a Consumer Proposal, but the potential for significant debt reduction can bring a huge sense of relief.
A Closer Look at Pro’s and Con’s of a Proposal
Pros
- Debt reduction – A Consumer Proposal can reduce your debt by up to 80%.
- Stops Interest – Once your Licensed Insolvency Trustee files your Proposal, interest and fees stop. Your debt load won’t increase due to extra charges.
- One payment – You’ll have one monthly payment to make to your LIT instead of multiple debt payments.
- Legally binding – Your creditors must stop all collection activity. Collection activity includes phone calls, wage garnishment and legal action.
- Asset protection – You keep your assets in a CP, including your home, vehicle and investments.
- No Extra fees – Your fees are part of your Proposal payment.
- The payment period -You have up to five years to repay your Consumer Proposal.
Cons
- Affects Credit Score – A Consumer Proposal will reduce your credit rating to an R7. It will stay on your credit report for up to six years.
- Debt exclusions – Most unsecured debts are included, but some aren’t. Some debts such as secured debts, spousal and child support, newer student loans, and court fines are excluded.
- Monthly payments -You must make your monthly payments, or your Consumer Proposal can be annulled.
- Creditors can reject terms – Your creditors can refuse to accept it. This is rare but can happen.
Filing a Consumer Proposal Nova Scotia
Filing a consumer debt proposal is a relatively quick and straightforward process. These are the basic steps you need to take in order to file a Consumer Proposal:
- Book an appointment with a LIT. The first consultation to review your situation is free.
- Give your LIT all your financial information so if you qualify, they can develop your Consumer Proposal.
- Your LIT will file your Consumer Proposal.
- Your creditors will vote to accept or reject the agreement. If the creditors who hold 50% or more of your debt agree to accept it, it will proceed with court approval. This process takes at least 60 days.
- Once your creditors and the court approve your LIT, you make your payments until the Consumer Proposal is paid in full.
Finding Financial Support in Nova Scotia
Dealing with a crushing debt load can increase stress, affect your relationships, and negatively impact your health. However, you’re not alone in the struggle. Our team of Licensed Insolvency Trustees at Allan Marshall and Associates are here to provide expert guidance and support in navigating debt relief solutions.
Contact us today at 1-888-371-8911 or online for a free consultation. We’re committed to working with you to find the best solution for your debt, providing support and guidance in your journey to financial freedom.
