A Consumer Proposal is a legal agreement between you and your creditors to negotiate the repayment of the money you owe. You can ask for a reduction of the debt owed and a new prolonged payment plan.
In most cases creditors will work with you and make some concessions if you meet certain eligibility criteria.
To be eligible to file a Consumer Proposal you must:
- Be at least 18 years of age
- File as an individual. Corporations cannot file consumer proposals.
- Not have any ongoing or unfinished previous proposals.
- Owe at least $1,000 to unsecured creditors but not more than $250,000 (this is excluding the mortgage or other debts secured on your principle residence)
- Have relatively stable income to continue to meet your financial obligations, including making the consumer proposal payments.
- Be insolvent. This means that your debts have to exceed your assets and your monthly income is not sufficient to cover your living expenses and service the existing debt effectively.
- File a consumer proposal through a Licensed Insolvency Trustee or a Consumer Proposal Administrator.
- Generate sufficient income to make the monthly consumer proposal payments.
If the above apply to your situation a consumer proposal may be a perfect solution for your debt problems.
Some of the benefits of consumer proposals:
- You can negotiate to pay back only a portion of the debt you owe. When creating a proposal to your creditors, you can work with your Administrator/Trustee to negotiate payment terms to repay less than what you owe. Creditors will usually agree if it is more than what they would receive if you filed for bankruptcy.
- Pay over 60 monthly installments. You can negotiate to pay off the new (settled) amount over 5 years.
- Your monthly payment never increases. Even if your income increases or you come into money after filing a Consumer Proposal your monthly payment is set and will not increase.
- Immediate stoppage of interest charges.
- Collection calls from creditors stop.
- All legal actions and claims against you are stopped. If your creditors have filed lawsuits or made legal claims or actions, all these activities will be stopped.
- You can retain/keep all of your assets.
- Less damaging to your credit than filing for bankruptcy. Comes off your credit report in a shorter amount of time and allows you to solve debt problems without going bankrupt.
- The consumer proposal is free.
The first step is giving us a call for your free consultation. We’ll go over any questions you may have and provide a recommendation on the best course of action for your particular situation.
This call is completely free with no-obligation. Get in touch today and take the first step to freedom from debt!