* Having trouble paying all your bills, even though you have a good job?
* Thinking about filing bankruptcy, but not really wanting to?
* Simply looking for more information about ways to deal with your debt?
What do you do?
If you find yourself in this situation month after month, a Consumer Proposal may just be what you’re looking for.
A Consumer Proposal is suitable if:
You have debts over $5,000, but not over $250,000 (not including your home mortgage).
You've got a good job, and can afford to make some payments each month.
You just cannot afford to repay everyone in full with interest.
You can’t get a debt consolidation loan because your debts are too high, even with your steady job.
You don’t want to go bankrupt, because:
With your income, you would be subject to surplus income penalties.
You don’t want to lose any of your assets, such as a valuable home or car.
Advantages of a Consumer proposal
For you the consumer:
You can negotiate to repay only a portion of the debt you owe.
Interest stops accumulating at the date you file.
All of your unsecured debts are included, except some limited categories (see below). Debts from credit cards, bank loans, payday loans, and income taxes are included.
Maximum repayment period is five years.
All collection activities by creditors (except for support and alimony) are immediately stopped, including wage garnishment.
You don’t lose your house or any other assets.
The effect on your credit rating is less severe than a bankruptcy.
You meet a portion of your obligations to your creditors.
Why would your creditors accept a consumer proposal where they are getting less than the full amount they are owed? In most cases they don’t want you to go bankrupt. A Consumer Proposal is better for them because even though they may not get all of their money, they are getting more than they would get in a bankruptcy.
What a consumer proposal won’t do for you
A Consumer Proposal will not:
Allow you to pick and choose the debts to be included.
Eliminate your support and alimony obligations.
Eliminate your student loan obligations.
Deal with your secured debts, such as your house mortgage and car loan. Your trustee can advise how to deal with these.
Where to go from here?
For a free consultation on whether a Consumer Proposal is right for you, contact a Trustee.
