In the world of financial problems and debt solution, just about everyone is familiar with the word bankruptcy, but not everyone has heard of a consumer proposal. When bankruptcy isn’t the right answer, but you definitely need some kind of help, a consumer proposal is often the ideal solution.

What Is It?

A consumer proposal is a debt solution whereby a contract is negotiated with your creditors on your behalf, by a bankruptcy trustee. It is not a bankruptcy, but more like a plan to clear up the debts and accounts and get your financial life back in order.

How Does It Work?

With a consumer proposal, you agree to pay a portion of the debt owed to your creditors, and they agree to close the accounts once you do. Your bankruptcy trustee will go over all the details with you, then file the proposal and wait for the creditors to come back with a decision.

The creditors have up to 45 days to decide. If it is accepted, you will start making payments according to a predetermined timeline.

Does It Affect Credit Rating?

A consumer proposal does have an effect on your credit rating, and although it isn’t as bad as filing for bankruptcy, it is still down there. You can expect the note signaling that you filed a consumer proposal to stay on your file for the duration of the proposal.

How Do I Proceed?

The first thing you need to do is contact a bankruptcy trustee and complete an assessment.  This assessment will tell you if a proposal is the right way to proceed for your specific situation.

You must have a certain amount of debt, and a means to make the scheduled payments every month.  Unlike a bankruptcy, a consumer proposal allows you to keep your assets and still take care of the situation.

No one wants to get into the type of situation where the words bankruptcy or consumer proposal are mentioned at all, but if you’re already there a proposal may be an option to help your situation that you have yet to consider.  Give us a call today to get started.