A consumer proposal is a deal you make with your creditors to pay a portion of your debts. It is a great debt relief option if you cannot afford to pay your debts in full but would like to avoid bankruptcy.
The payment terms are based on a monthly payment that you can afford and typically last from three to five years.
Why would your creditors accept only a partial payment for the elimination of your full unsecured debts? The proposal must be fair and reasonable to both you, and to the people you owe money to. In most cases, if your proposal offers more to the creditors than they would receive in a bankruptcy, they are likely to accept the proposal. Your Consumer Proposal Administrator (a trustee in bankruptcy) will work with you to negotiate a deal with your creditors that both you and your creditors can accept.
Why is a consumer proposal the best way to settle your debts with your creditors for less than you owe?
- Once accepted it is legally binding on ALL of your unsecured creditors.
- The costs of your proposal are included in your single monthly payment.
- You do not make any payments until your proposal is filed with the government by your Consumer Proposal Administrator (a trustee in bankruptcy).
- If you have assets such as a home you would like to keep, a consumer proposal is a great alternative to filing bankruptcy.
- A consumer proposal is a also a good option if you have a previous bankruptcy. (See Suzy’s story about Bankruptcy is not for everyone – There are Advantages to filing a Consumer Proposal).
If you are struggling with overwhelming debts, and can only afford to repay a portion of what you owe, the first step is to talk to a trustee in bankruptcy. Your trustee will help you determine if you qualify for a consumer proposal and if that truly is your best solution. Get started today – get a free initial assessment and see if a consumer proposal is right for you.