– Getting Started & Next Steps

Importance of a Consumer Proposal

Consumer proposals are government approved documents that help someone in Canada to settle his or her debts. It is the most preferred way to settle debts by most people than using bankruptcy method. It is very normal for people in one point of life to find themselves in debts that are so hard to settle and so they either choose to declare themselves bankrupt or to file a consumer proposal. Bankruptcy has so many disadvantages that make people opt to file a consumer proposal to settle their debts. The good news about filing a consumer proposal is that the binding agreements protects you against debt collectors by giving you a plan on how to repay the loan. Creditors like the consumer proposal because of its plan of the person to pay them some partial payment. When you qualify for a consumer proposal agreement which half of your creditors should accept for you to qualify, you attend two credit counseling sessions to be guided on budgeting skills. Some of the consumer proposal benefits are discussed below.

One of the main advantages of a consumer proposal agreement is the protection of your assets like cars, house, land and any other asset. It is very important because people are able to plan themselves well with no pressure from the creditors. If by any chance you start getting better payment it does not change the amount you were paying monthly so it remains fixed. When you declare yourself bankrupt it means your property can be taken by the creditors anytime and this is not a good idea so if you have debts that you find hard to pay it is good to take a consumer proposal so as to save your assets.

Your monthly payments lower after you file a consumer proposal. A consumer proposal is good because it helps people pay their debt by giving them the plan on how to settle the debts. In most cases you even find that the debt has been reduced by 70% of the actual debt that you have. The consumer proposal is safe and best in terms of debt consolidation options. There are no interests during this period of a consumer proposal and so you get good savings over second mortgage or over a debt consolidation.

Another advantage of a consumer proposal is that someone acquires consumer protection. In this it means that no creditor is allowed to stress you because you already have a legal document of how you should pay him or her. The consumer proposal has some agreements that bind all creditors together according to the agreement and so no creditor should refuse it as long as it is approved. The act that covers the consumer proposal is known as the act of bankruptcy and insolvency.