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A Consumer Proposal Process is an official debt settlement with creditors. It is a proposal from the borrower to the creditors for the purpose of negotiating a debt repayment. It is administered by a trustee in bankruptcy who undertakes all the negotiations and oversees the settlement process. The Consumer Proposal settlement can include a debt reduction, extended repayment plan, or consist of both.
The percentage of debt reduction varies case by case, and is directly related to the debtors employment situation, total debt amount involved, assets in possession and family situation. Usually fifty to eighty percent of the unsecured debt can be written off and the balance spread over three, four or five year term to be paid off in monthly payments.
Eligible Debts:
- Credit Cards
- Lines Of Credit
- Personal Loans
- Utility Bills
- CRA Tax Bills
- Department Store Credit
- Telephone Bills
- Student Loans (some conditions apply)
Generally, most of the unsecured debt can be included in the proposal.
The process of Consumer Proposal offers many advantages: in some cases the debtors can retain their assets, legal actions such as wage garnishments can be stopped, and the debt problems can be resolved without having to declare bankruptcy.
Consumer Proposal is a great solution for the honest but unfortunate individuals. It provides financial relief, allows to get back on track and helps to avoid bankruptcy.