A consumer proposal will enable you to offer a monthly repayment to your creditors over a period of up to 5 years based on your budget (income left after expenses).
The total of the monthly payments represents the amount of your consumer proposal.
Benefits for Consumer Proposal
- Enables you to make a single monthly payment to your creditors
- Freezes the interest that you’re accumulating on your debt
- In most cases will reduce the amount of money that you owe
- Will stop any collection/enforcement action being taken against you like wage garnishments
- Does not involve an ongoing reporting obligation as is the case in Bankruptcy
- Once accepted can be paid in full at any time – if you come into a lump sum of money you can pay it off early which will enable you to start rebuilding your credit sooner.
- Johnny and Sarah have one child and owe $40,000 in credit card debt with monthly payments that total $1,000.00 per/mo.
- Their monthly household income is $4,000. After their living expenses they are left with $300 per month, leaving them short $700 each month when the bills come in.
- Offering a proposal to their creditors of $18,000 in total, means that they will pay $300 per month for 5 years.
Through the consumer proposal Johnny and Sarah:
- Stop the interest from accumulating on their credit
- Are able to make a monthly payment to their creditors that they can afford
- Will reduce their debt by $22,000
The Consumer Proposal Process
Step One – we will work with you to come up with a consumer proposal that is likely to be accepted by your creditors and proposes terms you can live with
Step Two – we will file the proposal with your creditors
Step Three – if your creditors and the Court accept the consumer proposal you will begin making a monthly payment to us which we will then be dispersed to your creditors
Finally, consumer proposals can only be arranged through a Licensed Insolvency Trustee.
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