Consumer proposals are one of the most popular and successful alternatives to bankruptcy. When you reach a point where you cannot repay your debt according to your creditor’s timeline, it is time to put a Plan B into effect. Consumer proposals are a great option to consider, as they allow you to avoid the long-term damage to your credit that comes with filing for bankruptcy. On the downside, however, consumer proposals do not apply to secured credits (like mortgages), and they do still have an impact on your credit rating (although not as severe).
Consumer proposals are one form of debt consolidation, but you can also take out a debt consolidation loan. Credit Councillors use these loans to reduce the number of interest fees an individual must pay and make settlement simpler by combining multiple debts into a single monthly payment.
Your bankruptcy trustee in Edmonton may suggest a consolidation loan for you if they believe you have the ability to make the monthly payments. But remember— if you fail to make your monthly payments or if you continue to accumulate more debt, you may have to pay even higher interest rates later.