What Is Consumer Proposals?
Consumer Proposals As A Debt Settlement Plan In Canada Consumers proposals are legal abiding debt settlement agreements, which are filed with a certified bankruptcy trustee, to pay back a creditor a certain proportion of what you owe in interchange for complete debt forgiveness. Payment of proposals are interest-free and could be spread out over a maximum of five years. To this effect, this can lead to about 70% to 80% of savings. Your terms of payment depend on the negotiation between what you can afford to pay and what your creditor expect to get. Acting as an administrator for consumer proposals, your certified bankruptcy trustee will meet with you to help determine how much you have to offer and to evaluate your financial condition. A consumer proposal plan offers debt relief for Canadians struggling with paying monthly debts while avoiding going bankrupt. In Canada, the consumer debt proposals are the only program for debt settlement approved by the government. It is common to see a settlement of 20 to 30 cents in the dollar, but debt proposals differ. Final agreements are based on what you own and your income. However, all debt proposals to a creditor are unique. Will A Consumer Proposal Do Away With Debt? Consumer credit proposals deal with an unsecured creditor and can get rid of practically all debts such as:
- Student loan debts
- Tax debts include Personal Tax, HST and Source Deduction payment
- Payday loans
- Bank loans
- Credit card loans and Unsecured Line of credit
- It prevents bankruptcy
- It puts an end to calls from wage garnishments and collection agencies
- It lawfully binds all creditors to your offer including the Canada revenue agency and payday lenders
- It freezes interest on debts
- It merges debts into a low-end monthly payment
- It keeps all your properties including any equity in your residence
- It reduces your liability by up to 70 to 80 percent.
- You must either have a property in Canada or be a resident of Canada.
- Excluding your mortgage, your unsecured loan should not surpass 250,000 dollars.
- You must be insolvent. This means that you can no more keep up with debt payments as they become due, or your debts must be higher than the value of any asset you have.
- You must be capable of paying a part of your debt.
Perhaps the most common question those considering bankruptcy ask is, “Will I lose all my assets?” Happily, the answer is no. There are several exemptions from seizure. They are:
- Household furnishings to a value of $13,150
- Personal effects to a value of $5,650
- Tools of trade to a value of $11,300
- Motor vehicles to a value of $6,600
- Farmers’ business assets to a value of $29,100
- Certain life insurance policies
- Most pensions
- Certain RRSPs