Repay part of debts, stop collections, lower payments protect assets & avoid bankruptcy
What is a Consumer Proposal
A consumer proposal is a legally binding agreement between a debtor and their creditors to pay off a portion of their debts.
The main advantage of a consumer proposal is that it allows the debtor to repay their debts in a more manageable and affordable way, and it provides protection from creditor actions such as lawsuits or wage garnishments.
In Ontario, a consumer proposal is administered under the Bankruptcy and Insolvency Act and can provide relief to individuals who are facing financial hardship.
If you are considering filing a consumer proposal in Ontario, it is important to understand the advantages that this process can provide to become debt free.
1. Repay Only a Portion of Your Debts
A consumer proposal allows you to repay a portion of your debts:
When you file a consumer proposal, you are able to negotiate with your creditors to pay back a portion of your debts. This means that if you are unable to pay off your entire debt, you can still come to an agreement with your creditors to pay back a portion of what you owe.
This can be a more manageable and realistic solution for individuals who are facing financial hardship.
2. Stop Collection Calls
A consumer proposal can stop collection activity:
When you file a consumer proposal, an automatic stay goes into effect which stops all collection activity against you. This means that your creditors are not allowed to take any legal action against you to collect your debts.
This can provide you with some much-needed relief if you are facing constant harassment from creditors.
3. Lower your Monthly Payments
A consumer proposal can lower your monthly payments:
When you file a consumer proposal, you are able to negotiate a lower monthly payment with your creditors. This can be a significant advantage if you are struggling to make your current monthly payments.
By reducing your monthly payments, you may be able to free up more of your income for other necessities, such as housing and food.
4. Protect Your Assets
A consumer proposal can protect your assets:
When you file a consumer proposal, your assets are protected from seizure by your creditors. This means that you will not lose your home, car, or other valuable assets if you file a consumer proposal.
This can be a significant advantage if you are concerned about losing your assets due to financial hardship.
5. Avoids Bankruptcy
A consumer proposal can help you avoid bankruptcy:
Filing a consumer proposal is an alternative to bankruptcy, which can have more severe consequences. If you are unable to pay your debts as they become due, bankruptcy may be the only option available to you.
However, if you file a consumer proposal, you may be able to avoid bankruptcy and the negative consequences that come with it, such as the loss of your assets and the impact on your credit rating.
Consumer Proposal Advantages
Overall, a consumer proposal can be a valuable tool for individuals who are facing financial hardship and are unable to pay their debts as they become due.
By allowing you to repay a portion of your debts, stopping collection activity, lowering your monthly payments, protecting your assets, and helping you avoid bankruptcy, a consumer proposal can provide significant relief and allow you to get your finances back on track.