Consumer Proposal vs. Debt Settlement – Which one is for you?
The graphic below compares the benefits of a Consumer Proposal and Debt Settlement. Before we take a look at the chart it’s important to note that both are viable solutions to resolving debt problems. The choice you make will depend on your risk tolerance and the urgency of solving the debt problem.
A consumer proposal is a good choice for people who have a job and own some assets, such as a vehicle, home, RRSPs, etc. It is somewhat stressful during the preparation and filing of the paperwork but after the proposal is accepted you simply make your monthly payment until the proposal is paid off.
Debt settlement on the other hand requires holding off on payment for as long as possible. This strategy is based on the fact that as more time passes the creditors will want to accept something rather than nothing. While not a bad approach, if creditors get even a slight hint that you have assets or access to funds they will file legal action and you will have no choice but to file bankruptcy or a consumer proposal.
In addition, the debt settlement process requires nerves of steel as calls and letters from debt collectors will not necessarily stop.
As we said in the beginning, both are viable options to deal with your debt problems. Consumer proposal is for someone who wants to deal with the problem and move on. Debt settlement is a good option for people who have been out of the country for a long time or for whom the debt problems are not yet a priority.
Now that you know how these two options work we invite you to take us up on a free, no –obligation consultation with a proposal administrator. We’ll answer any questions you may have and provide more details on the best debt management solution for your particular situation.
