If you’ve found your way here, it’s because you’ve come to the realisation that you must DO SOMETHING about your debt. Maybe you’re having trouble sleeping because of all the bills piling up. Creditors may be calling you because you’ve fallen behind on payments. It’s possible that you and your spouse are arguing over money because there just isn’t enough of it to go around each month.
This financial situation may have led you to believe that bankruptcy was the only way out of this predicament. The good news is that you’re not alone if you’re having problems paying off your debt.
Other options exist. Many people are unaware that the government has a second option for dealing with debt, which was established many years ago. Consumer proposals are what they’re called.
What is a consumer proposal? Simply put, it’s a bargain you make with your creditors. It’s a wonderful deal because you usually pay back less than 100% of what you owe. It’s also a win-win situation for your creditors, who will accept your offer because it exceeds their expectations.
A proposal also saves you money on interest. Then you pay a predetermined monthly amount with no interest. You usually have five years to pay, but you can pay early if you choose.
What Debts Can a Consumer Proposal Include?
Understanding secured vs unsecured debts is key to answering this question. A secured debt is always backed by an asset, such as a house or a car. If you don’t pay a secured obligation on time, the creditor has the authority to repossess the asset. Mortgages and auto loans are the most frequent secured obligations. In general, you can include practically all unsecured debts in your consumer proposal. Included are:
· Credit cards
· Bank loans
· Tax debt
· Payday loans
· Unsecured loans
· Personal loans
· Student loans if you graduated more than seven years ago
Student loans (if less than seven years old), spousal or child support payments and court-ordered fines are all examples of unsecured debts that cannot be included in a consumer proposal.
What Is the Process of a Consumer Proposal?
Is there anything else you need to know about the proposal process? A Licensed Insolvency Trustee (LIT), like Debt Relief Canada, is the initial step. The federal government licences and regulates trustees, who are also Court Officers.
There is only one person who can legally shield you from your creditors: a Licensed Insolvency Trustee (LIT). These legal authorities and the capacity to file a consumer proposal are not available to any other organisations in Canada, such as credit counsellors or the numerous debt advising firms.
When you call Fisher & Associates, the first thing we do is ask you for some basic information about yourself. This is something that can be done over the phone or face-to-face. We shall inquire as to how much and to whom you owe. For example, if you own a car or a home, we’ll take a look at your income and any large assets you may have.
In the end, we’ll figure out exactly how many people live in your house. We now have a complete picture of your financial status thanks to this information. Next, we’ll set up a time to meet with you in person.
At the first appointment, we’ll go through all of your options for dealing with your debt. Using the information you’ve provided, we can estimate how much you’ll have to pay in a proposal. We can go over your finances and see if submitting a proposal or declaring bankruptcy makes more sense for you.
We’ll let you know whether there are any other options besides filing for bankruptcy or making a proposal to your creditors. We’re here to help you succeed! A consumer proposal must be reasonable and acceptable to creditors if it is to be accepted by them.
Next, you’ll need to submit proof of your income, debts, and assets worth to us. We’ll meet with you again to go over the paperwork, and then we’ll submit your plan to the creditors.
By submitting the proposal, you formally insulate yourself from the creditors you owe money to. You no longer pay them directly. The debt collectors must immediately cease all collection operations, or they will be harassed for the last time! They also have no legal authority to sue you or take money from your bank account.
A legal timer begins to run as soon as the proposal is filed. Upon receipt, your creditors have 45 days to review your proposal before deciding whether or not to accept it. Most of the time, creditors accept your initial proposal offer since they receive more money than if you had filed for personal bankruptcy in the first instance. When it comes to personal bankruptcy, creditors are more likely to accept a consumer proposal and are more inclined to do so.