What is a consumer proposal?
A consumer proposal is a legal proceeding designed to help those in debt agree with their creditors. It involves working closely with a Licensed Insolvency Trustee to develop a repayment plan that satisfies all parties. It will usually culminate in clearing many of your unsecured debts and requiring you to pay significantly less than the sum of what you owe. It makes your debt repayment more manageable and affordable while affording you and your assets a lot more protection.
The advantages of a consumer proposal
As an alternative to bankruptcy, a consumer proposal has many advantages. These include:
- With a consumer proposal, you can reduce your unsecured debt by as much as 80%.
- You can make your debt far more manageable and stress-free by consolidating them into one affordable monthly payment.
- You will avoid filing for bankruptcy, which can negatively affect employment or professional certifications.
- As soon as you file your consumer proposal, any interest and penalties will be automatically frozen, preventing you from racking up any further debt.
- With bankruptcy, you must surrender any non-exempt assets, including property equity, your car, and any investments you may have. On the other hand, consumer proposals allow you to protect and keep your assets.
- A stay of proceedings will get ruled, protecting you from creditors and ending collection calls and wage garnishments.
- It will affect your credit rating far less than bankruptcy.