People go into debt for many reasons, which is why it should come as no surprise to learn that the process of getting out of debt will also depend heavily on individual circumstances. In some cases, filing for bankruptcy will be the only option; while in other instances, there may be alternatives to bankruptcy that are a better choice.
One alternative to bankruptcy that may be effective is a consumer proposal. A consumer proposal is a formal debt settlement option legislated under the Bankruptcy and Insolvency Act and filed with a licensed insolvency trustee. It allows you to compromise your personal debts by making an offer to your creditors to modify your payments (for a maximum of five years). To help you decided if a consumer proposal is right for you, learn what to expect when preparing one.
Detailed Financial Evaluation
For a consumer proposal to be effective, we would need to determine exactly how large a monthly payment you can afford. To do that, a list of your income, assets and liabilities will be required. Though you could do some of this legwork on your own, it may be best to wait until you have found an administrator of consumer proposals to work with you. This will help you to avoid multiple calls to track down the information you require.
Negotiate with Creditors on Your Behalf
It’s hard to put your fate in someone else’s hands, but when it comes to negotiating a consumer proposal, that’s exactly what must be done. Once we have consulted with you to determine the maximum amount you can afford to pay back each month, we will present your consumer proposal to your creditors. They will then have 45 days to accept or reject your proposal.
Most consumer proposals are accepted, but if it is rejected, we have a couple of options. We can revise and resubmit your proposal, or we consider other methods to help you get out of debt.
Not Easy to Amend Once Finalized
A consumer proposal is not an easy or quick way to get out of debt. Usually, the goal of a consumer proposal is to discharge your debt over the course of several years. It assumes that you will rigorously adhere to the repayment plan, because failure to do so may spell annulment for your consumer proposal.
Because consumer proposals are intended to be long-term plans, you must discuss any foreseeable changes in your financial circumstances with your consumer proposal administrator to determine if this is still a good plan to manage your debt.
If a consumer proposal sounds like an option for you, contact our office today for a free, no-obligation consultation.