When debt becomes unmanageable, knowing where to turn can be tough. Knowing the options available to deal with that debt can be difficult – and that is why getting outside advice is often a great idea. One of the most popular options right now, one that requires additional assistance, is a consumer proposal.
New to this concept but wondering what a consumer proposal is all about? A consumer proposal is a legally binding agreement between you and your creditors.
Consumer proposals have grown in popularity over the last few years, and for good reason. There are a number of significant benefits to filing a consumer proposal:
- Provides immediate relief from collectors – stops the calls and the letters.
- Will stop interest accumulating from the date that you file.
- Will stop most wage garnishments or frozen bank accounts.
- May decrease the total amount of your debts.
- Assessment and Qualification - a meeting with a debt consultant will assess your current financial situation and determine the best route to take. If you qualify, the paperwork can be started.
- Repayment Terms – based on your monthly income and current debts, a repayment plan will be established that you can afford and that will please your creditors.
- Filing the Documents – your licensed proposal administrator will file all of the required documents. This includes submitting the consumer proposal to your creditors.
- Creditors Vote – once the documents are received by your creditors, they have 45 days to vote to accept or reject the proposal. If the vote is 25% or more to reject, a meeting will be held to try and negotiate. Once accepted, you will be required to make the monthly payments to your administrator to be distributed to your creditors.
- Completed Proposal – once you’ve completed the consumer proposal you will receive a Certificate of Full Completion as proof of the completed proposal. Typically, after three years following completion, the consumer proposal will be removed from your credit report.
What if you can’t keep up with the payments?
If an unforeseen circumstance makes fulfilling payment arrangements impossible (job loss for example), the first thing to do is call your administrator. By law you can miss or defer two payments without consequence, but after that the proposal will be cancelled. At the first sign of trouble, speak with your administrator to find out your options.
Consumer proposals can offer individuals the chance to start fresh and eliminate financial stress in a
major way. If you believe that a consumer proposal might be an answer to your debt problems, don’t wait. The process can take time, so it is best to get it started right away.
For more information about consumer proposals and the many benefits of filing one please call DebtCare Canada today at 1-888-890-0888.