consumer proposalS a leading alternative to bankruptcy
There are a number of key benefits to filing a consumer proposal to relieve your debt problems. Firstly, and probably most importantly, you are taking the step toward regaining control of your life. You are in the driver’s seat. Key advantages of making a consumer proposal to your creditors include:
Taking control of your financial situation - Making a consumer proposal puts you back in control of your financial situation, giving you the opportunity to make a fresh start. With the weight of unmanageable debt gone, you can work toward your financial and life goals.
Negotiating to repay only a portion of your debt - For example, if you owed $50,000 to your creditors, based on your financial situation, you could negotiate to pay back less than 30 percent of this debt and reduce the amount you have to repay to $15,000 or less.
Consolidating debt into one manageable monthly payment - When you make a consumer proposal, all of the debts included in the proposal are consolidated and you make only a monthly payment to your Trustee. You can also make an arrangement to make bigger lump sum payments if your situation allows. Your trustee will discuss your options with you.
Freezing interest at the date you file - When you make a proposal, all of the charges on your loans and credit cards and tax liabilities are stopped and you will not accumulate any more interest.
Stopping creditors from taking any legal action - Making a consumer proposal puts an end to the stressful and aggressive phone calls from collection agencies. Creditors can no longer contact you or take any action, such as garnishing your wages.
Protecting your assets (car, home, RRSPs, RESPs) - If you own your own home, car and have money saved in RRSPs and RESPs, a consumer proposal can ensure that you will keep these assets.
Extending the time for repayment - The length of a proposal can vary from lump sum payments to monthly payments for anywhere between 36 to 60 months (three to five years), which enables you to repay your debt over a period of time that keeps your payments manageable.
No fees other than your monthly payment - You only pay your manageable monthly installment (or lump sum payment) to the Trustee.
Avoiding bankruptcy - A consumer proposal is a good alternative if you are worried that you may need to file for bankruptcy.
To discuss your situation with a Trustee and find out if you can benefit from making a proposal to creditors, contact BDO.