A consumer proposal may be an option if you have a job, some cash flow and some surplus cash after paying for your living expenses such as housing, food and transportation but you do not have enough to pay all of your creditors everything that you owe them each month.
For example, if when looking at your monthly income you find that after covering your necessary expenses you only have $600 left over, but the monthly payments on your credit cards add up to $1500, you obviously cant afford to pay it all but you CAN give them something!
With a trustee in bankruptcy’s help, you can design a proposal using the funds you have available and offer it to the creditors over a period of 2-5 years. This way, you will pay back some but not all of what you owe. If the proposal is a good one, it will be fair for both you and your creditors and the bankruptcy trustee will ensure that this is the case before they present it. Once presented, the majority of your creditors need to agree to it. If the proposal has been well-designed, they should accept it, because they will be getting more from the proposal than they would if you needed to file bankruptcy.
As long as you keep up with the agreed-upon monthly payments for the period of the proposal, at the end of it you will be free from your debts and will have successfully avoided the need to file personal bankruptcy.
A consumer proposal is a classic win-win situation. You win because you can feel good knowing that you have not filed for bankruptcy and have been able to pay off some of your debts, and the creditors win because they are going to get more money from you than they would if you had filed bankruptcy. If you would like to learn more about filing a consumer proposal, contact us today in Toronto at 310-PLAN (no area code required) or e-mail us to arrange a meeting to talk about how a consumer proposal can give you a fresh start.