For many people in the Brampton region who are financially distressed, Brampton consumer proposals may be one possible debt solution for their personal financial problems. It’s one of the legal options for debt relief made available by the federal government through the Bankruptcy and Insolvency Act.
A consumer is a legal agreement between you and your creditors. Basically, your creditors agree to a reduced amount of your debt and, in turn, you agree that you will pay back the whole amount within the period negotiated, which can be from three up to five years.
Many people in Brampton prefer this method to help them pay off their debts over filing for bankruptcy for many reasons:
Affordable payments
One of the best advantage of consumer proposals is the ability it gives to make repaying debts affordable. If you’re having trouble making monthly payments, a consumer proposal can reduce the balance on your debt and helps you to pay them off in a timeline that is manageable for you. You and a licensed insolvency trustee will work out a monthly amount you can afford to pay. The LIT will then present this offer when negotiating with your creditors. Once your proposal is accepted, you will start making one monthly payment to your trustee who then distributes the money to your creditors. One really good thing with working with a trustee is that he will review your current financial state before making any offer to your creditors, making sure that you have enough money to pay for your debts so that you don’t default on the agreement.
Lower total debts
In a consumer proposal, you’re essentially making a deal with your creditors. You’re basically asking them to to help you get out of debt in a way that you can afford to and to give you more time to do so. So your creditors agree to forgive part of your total debt and to fully restructure whatever amount is outstanding into a smaller sum with a payment plan that you can manage and which is also fair to them. Unlike a loan consolidation where you pay your existing debt with another loan, a consumer proposal lowers the total amount you owe and allows you up to five years to pay off your debts without any interest accumulating. In many cases, it can reduce debts by up to eighty-five percent.
More flexibility
A consumer proposal offers more flexibility than a bankruptcy in several ways.
You are not required to report your income to the trustee.
You do not have to make surplus income payments.
If your financial circumstances change and you are earning more income, you can accelerate your payments and pay it off early.
You have control of your assets and can retain your house, car and manage and make withdrawals from your bank and investment accounts freely.
Stop all collection activities
A consumer proposal is one way to legally stop creditors from contacting you.
Once you file a consumer proposal and your trustee notifies your creditors, they are required by law to stop all interest charges, phone calls, collection letters, wage garnishments and any threats of legal action.
If you live in Brampton and have unsecured debt that is more than $5,000 but less than $250,000, you might want to think if Brampton consumer proposals can work for you. With a reduced balance on your debt and a set timetable to pay them off, it can likely help you to become debt free in no time at all.
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