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Consumer Proposal Is it a Solution for Me?

If you are struggling to pay your bills, the situation persists month after month without getting any better, and you don’t want to go bankrupt, but feel you are getting overwhelmed, you may want to look at a Proposal as a possible solution.

What Advantages does a Consumer Proposal offer me?

  • 1. All collection actions are stopped when you file a Proposal and judgments, garnishees are suspended pending acceptance of your Proposal by your Creditors;
  • 2. No interest is payable on your debts from the Proposal date forward, and this offers a huge saving;
  • 3. You can make arrangements with your creditors to pay less than the full value or only a portion of your debts;
  • 4. All unsecured debts can be included in a Proposal, and you are protected from all creditors, save and except maintenance, alimony, or debts arising out of fraud, misappropriation or criminal activity;
  • 5. You can make your payments in a more manageable amount over a proposal period of up to five years;
  • 6. You don’t lose your home or any assets you have pledged as security for your loans, as long as you make your payments on those secured debts;
  • 7. You can surrender assets you can no longer afford to pay for, including a home or car, and include any balances or shortfalls owed on those assets in your Proposal.

The Impact of a Proposal on your Credit is Less Severe when Compared to a Bankruptcy

If you have a good job with regular, stable income, and can make a regular recurring payment, but just can’t make full payments to your creditors, a Consumer Proposal may be perfect for you.

Why would your Creditors Accept a Proposal that Gives them Less than what you owe them?

The objective of a Proposal is for you to offer something to your creditors which will result in them getting more than if you filed
for bankruptcy. Your creditors don’t want to take less then the full value of their loan or debt, but if your Proposal offers significantly more money than they will get in a bankruptcy, but still something less than full value of what you owe, creditors will be faced with a business decision. In most cases, creditors do not want you to go bankrupt, and will accept reasonable proposals.

When is a Consumer Proposal a Practical Solution?

  • 1. You have debts over $10,000, but not more than $250,000;
  • 2. You have a stable secure job or career where you can afford to make regular monthly payments;
  • 3. You can’t afford to make your full payments, but can pay a significant portion of your debt if interest is waived or forgiven;
  • 4. You have tried to get a debt consolidation loan, and despite having a steady job, have been turned down and told your “debt ratio” is too high;
  • 5. You want to avoid bankruptcy or you have assets which are important to you, which you don’t want to lose in a bankruptcy;
  • 6. If you go bankrupt, the bankruptcy guidelines require you to make large monthly payments which you can’t manage.
  • 7. You can surrender assets you can no longer afford to pay for, including a home or car, and include any balances or shortfalls owed on those assets in your Proposal.

A Consumer Proposal has some Limitations and won’t:

  • Allow you to pick and choose or let you treat your creditors differently;
  • Eliminate student loan debts;
  • Eliminate child support or alimony payments
  • Take care of your secured debts, such as a mortgage on your home, or a car loan unless you give up or surrender the asset.

We have tried to make this website as comprehensive as possible, and we encourage you to explore its contents at your leisure.

If, however, you would like to speak to one of our professionals and explore the possibility of filing a Consumer Proposal, or just need more information about options, please do not hesitate to contact one of our professionals near you. Our initial consultations are always free, and we would be pleased to help you.

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