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Navigating through financial challenges can be daunting, but understanding your options is the first step towards regaining control. One such option, often overlooked, is a Consumer Proposal.
In this guide we will walk you through the details of consumer proposals, helping you figure out if it’s a viable option for your specific financial situation.
Key Points
- Understanding Consumer Proposals
- Qualification Criteria For a Consumer Proposal
- Why Choose a Consumer Proposal?
- What happens during a consumer proposal?
- When To Consider Other Debt Relief Options
- The Role of A Licensed Insolvency Trustee
Understanding Consumer Proposals
A Consumer Proposal is a debt solution tailored to individual needs, allowing you to manage your debts without the pressure of excessive interest rates or the fear of legal action from creditors. It’s a legally binding process, but simpler than you might think.
Qualification Criteria For a Consumer Proposal
To be eligible for a Consumer Proposal, you need to:
- File For Personal Debt: Consumer Proposals are designed for personal debt, including debts incurred from operating a business.
- Debt Limit: Your total debts should be less than $250,000, excluding the mortgage on your principal residence. For joint filings, this limit is less than $500,000.
- Insolvency: You must be insolvent, meaning you can’t pay your debts in full or owe more than the value of your assets.
- No Open Consumer Proposals: You cannot have an active Consumer Proposal already open, or bankruptcy.
Why Choose a Consumer Proposal?
There are a number of reasons why so many Canadians just like you opt for a consumer proposal. Here are a few of the main benefits:
- Credit History Not a Factor: Your credit score or history doesn’t impact your eligibility.
- No Cosigner Needed: You don’t require another person to back your proposal.
- Legal Protection: It provides legal protection from creditors, even if you haven’t missed any payments.
What happens during a consumer proposal?
The consumer proposal process involves a few key steps, from your initial consultation to negotiating with your creditors. Don’t worry, though; we’ll be there every step of the way, so you’ll always be kept in the loop and know exactly what’s going on. Take a look at our short video below to see what you can expect from a consumer proposal process.
When To Consider Other Debt Relief Options
While consumer proposals are a viable option for thousands of people and various financial situations, there are times when it might be better to consider other options. This is usually the case if:
- High Debt, Low Income: If your debt is exceptionally high with limited income, personal bankruptcy could be more suitable.
- Debts Over $250,000: Consider a Division I Proposal.
- Minimal Debt and Stable Income: Credit counselling might be a better fit.
- Specific Debts: If your debt includes certain types like ongoing mortgages or child support, a Consumer Proposal might not cover these.
The Role of A Licensed Insolvency Trustee
The first step in the consumer proposal journey is to partner with a Licensed Insolvency Trustee, like us at Harris & Partners. Think of us as your allies in this process, offering:
- Free, confidential consultations.
- Expert advice tailored to your unique financial situation.
- Protection from creditors and guidance every step of the way.
Take The First Step To Financial Freedom
We understand how crushing the weight of debt can feel. But with us, you don’t have to face this alone. If you’re feeling overwhelmed with financial struggles, reach out to one of our Licensed Insolvency Trustees.
We will take the time to sit with you and fully understand your specific financial situation, offering a judgement-free zone to openly share what you’re going through. This no-obligation chat could be your turning point towards a more secure financial future with the right debt relief solution.
