Consumer Proposals – A Toronto Bankruptcy Alternative
If you’re in financial difficulty, you might not be aware of all the options you have. Filing a consumer proposal to your creditors is one of them. Not a lot of people have heard about consumer proposals and even fewer know what they are.
What is a consumer proposal? A consumer proposal is essentially a plan that you make with your creditors to pay them back at your own pace over a set period of time. If you feel that you can pay back a portion or all of the money you owe, but you just need more time, a consumer proposal may be a great alternative to bankruptcy.
We start the consumer proposal process by determining how much you can afford to pay back every month, taking into consideration things like living expenses and your income. That amount will determine how long your consumer proposal will last (we can arrange a payment plan of up to five years). Remember: you may not be able to pay back all of your debts, but in most consumer proposals you pay back between 25% and 100% of what you owe.
Is it that easy? A consumer proposal is just that – a proposal. Your creditors have to accept the deal. Your creditors have 45 days to vote for or against your proposal, but the odds are still in your favour – you only have to get a simple majority to agree (50%+1 based on the dollars you owe) for the proposal to be accepted by all your creditors, even those who voted no. After that, if no one objects in the 15 days following the acceptance, your proposal will be approved by the court, and you and your creditors, and you, are officially committed to that plan.
What if they do vote no? If a majority of your creditors do vote against your consumer proposal, we will call a meeting with you and your creditors to help you negotiate a deal that is acceptable.
What happens to your debt? After the deal is worked out, you are only committed to paying back what you have agreed to. For that time, all calls from creditors will stop and any garnishment of your wages will also cease. And even better news is the debts will be frozen, meaning no more interest can be accumulated.
A consumer proposal may or may not be for you, but if you are in financial difficulty you have to remember that there are options available. Call the Bankruptcy Toronto and Consumer Proposal team at 310-PLAN (310-7526, no area code required) for more information and to set up a free consultation. You can also by e-mail us any questions you might have about consumer proposals. The best way to deal with your debt problems is to have a plan – let’s make one together.
