A unique option for individuals in Canada to resolve their debt is through a Consumer Proposal. The Consumer Proposal is filed through a Licensed Insolvency Trustee or LIT, similar to the need for an Licensed Insolvency Trustee for bankruptcy.
A Consumer Proposal, as a 4 Pillars debt consultant in Victoria can explain, is not the same as bankruptcy, and the two should not be confused. Working with the experienced professionals at 4 Pillars helps to clarify the differences between the two, understand the potential benefits of the consumer proposal, and decide if it is the best option.
The Basics
There are pros and cons to a Consumer Proposal. It is an agreement between the individual and the creditors that becomes legally binding once filed by the LIT. The LIT works with you and the creditors to develop the amount of the repayment, which is typically based on the amount of debt, your income, and other factors.
Once the consumer makes the offer through the LIT and the creditors accept, the payments begin on a monthly basis. There is no liquidation of property in the agreement, so it is very different from bankruptcy.
The length of a Consumer Proposal also varies, but it cannot be more than five years. There is no interest added to the total amount owed through the Consumer Proposal. This helps to limit the snowball effect of large amounts of debt that keeps increasing due to fees and interest. A 4 Pillars debt consultant can show you the different options in debt relief and help you to consider what is right for your financial situation.
A consumer proposal does not address all types of debt. A 4 Pillars debt consultant can help you to review your debt and determine if you qualify for this type of program.
