Advantages of Consumer Proposals (3 Minute Debt Break)

2022-06-03  3 minute read

Consumer Proposal


he bills are piling up. You’re constantly getting calls from creditors. You borrow money from friends and family but it doesn’t seem to be helping. You know that you need to do something, but … what exactly do you do? You don’t want to file a bankruptcy and wonder if there are other options. There are. Actually there are several alternative options. 


One attractive option may be to file a Consumer Proposal. There are a multitude of benefits of filing for a consumer proposal rather than a bankruptcy. Here are just a few.

For one, Consumer Proposals can provide fixed and lower payments. The payments on the Consumer Proposal can be set at the same amount each month for the entire period of the proposal. That allows for more stability and ease in budgeting each month. A lower payment is often achieved because the proposal allows a consumer proposal to be paid for a period of up to five years. By spreading out the total funds offered over a longer period of time, you are able to reduce the monthly payments and manage your debt obligations while also keeping with the costs of day-to-day expenses. 

Another benefit of a Consumer Proposal is that it stops Interest and Penalties. Once a Consumer Proposal has been filed with a Licensed Insolvency Trustee, the interest charged by the creditor ceases to apply. With the balance finalized, it will allow both you and the creditor to have a better understanding of what the creditors will receive as dividends and what you may want to offer. 

One more benefit of a Consumer Proposal is that you can retain control of assets. In the case of a bankruptcy, until the date that a person is discharged from their bankruptcy, most assets that they acquire become property of the bankrupt estate, though there are a few exemptions. For example, if a bankrupt individual inherits money during a bankruptcy, that individual would need to pay all funds into the estate required to pay off the creditors in full, plus all associated costs. 

A Consumer Proposal is different. If the same individual had filed a proposal, those funds would be retained by the debtor. The debtor would then have the ability to pay their proposal early or continue to make the agreed upon payments. 

Depending on your unique situation, there might be other debt solutions available to you as well, like debt consolidation, orderly payment of debts or an informal debt settlement. Speak with a Licensed Insolvency Trustee to review your financial situation and find the best option for dealing with your debt.


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