5 Top Benefits of a Consumer Proposals Brampton

Residents of the Brampton region who are in dire financial straits may be able to find

a solution with a consumer proposals Brampton. This debt relief program is one of two

insolvency options offered by the Canadian federal government under the Bankruptcy

and Insolvency Act. Many people use it to obtain relief from creditors as well as take

advantage of its many other powerful benefits.

Avoid bankruptcy

One of the top benefits that a consumer proposal offers is that it will allow you to pay

off your debts without resorting to bankruptcy. It’s become a popular alternative to

bankruptcy as most people across Canada don’t want to go bankrupt. If you have total

debts that do not exceed $250,000 (this does not include your mortgage) and you

have the financial capacity to repay a portion of your debts, you can file for a proposal

instead of a bankruptcy. If the proposal is accepted by the majority of your creditors,

you can then be well on your way to getting your finances back on track.

Keep your assets

Another big advantage is that a consumer proposal can allow you to keep assets that

might otherwise be taken away when you file a bankruptcy. In bankruptcy, you are

required to surrender certain assets and only keep assets that are exempted as part

of the negotiations for you to be able to receive a discharge and be absolved from

your unsecured debts. In a consumer proposal, you are not required to surrender

anything and so you can keep your home, car, RRSP and other valuable possessions

while repaying your debt.

Protection from creditors

Once your consumer proposal is filed, an automatic Stay of Proceedings takes effect

to protect you from your creditors. This immediately puts a stop to all harassing phone

calls you may be receiving from creditors. This will also stop creditors from garnishing

your wages or freezing your bank accounts. The Stay will also put a stop to any legal

action taken against you, including the ones that are pending in court.

Lower your debt

A consumer proposal is basically an offer that you make to your creditors where you

present to them your terms of payment and let them know that you can only afford to

repay a portion of what you owe. A licensed insolvency trustee will draft the offer and

negotiate with your creditors on your behalf to reduce the amount of debt that you need

to repay. If negotiations are done right, you may be able to lower your debt by as much

as 80%.

Fixed monthly payments

In a consumer proposal, you pay a fixed amount every month that won’t go up even

if your income increases. In a bankruptcy, if your income increases, you are required to

pay surplus income which means you will have to pay more. As part of the bankruptcy

process, you will be required to submit all proof of income to your trustee every month

and the trustee will compute if you have any surplus income and determine how much

more you will have to pay.

Filing for bankruptcy should be your very last option when you have an excessive

amount of debt and have no way to pay your creditors back. Talk to a licensed insolvency

trustee and consider filing a consumer proposals Brampton instead as it may be just

what you need to get your finances back on track without going bankrupt.

Debt Consolidation Toronto Can Help You Get Better Control of Debt

Toronto is a very expensive city to live in and many residents find themselves getting
overwhelmed by many debts from sources such as credit cards and payday lenders in
order to cope with living expenses. In many cases, debt consolidation Toronto can help
a great deal in making debts easier to manage and control.

Debt consolidation is one type of debt relief solution that allows you to combine all your
smaller debts and pay it using one loan that you get at a much lower interest rate. By
paying up all the smaller loans, you get rid of several debts that have different interest
charges and all  there is left to look out for is one monthly payment towards the new loan.

The primary aim you want to achieve when consolidating debt are the following:

1. To lower the interest rate,
2. Make the debt easier to manage by making only one monthly payment to
one creditor,
3. Pay out multiple debts in full with no negative consequences to your credit.

If you don’t achieve all three objectives, it can be a financial nightmare in the end.

Lowering the interest rate is one key factor to make this debt solution effective. If you
can’t find a loan that will reduce what you are currently paying on interest rates, then it
does not make sense to consolidate at all. Simply do the math to make sure that you
are actually paying a lesser amount in interest rates. Calculate the interest rates on all
your debts, including credit cards, payday loans and other unsecured loans you have,
and figure out how long it would take you to pay off these debts at your current payment
rate. Even if you get a loan with easy payment terms, but end up paying higher interest
rate because of the longer term, you will only be paying more debt in the long haul. This
totally defeats the purpose of consolidating. If it’s not possible to reduce your interest
rates, you certainly should reconsider this option. Many lenders can offer you a loan with
a low interest rate if you have a good credit score. If you do not meet the credit score
requirement, you have to work at improving your credit behavior first in order to bring
it up to standard.

Finding a consolidation loan with easier repayment terms is another critical factor to
make this debt solution work. It really does not matter if you choose a loan with a shorter
or longer repayment plan. What matters is that the loan provides the best terms in such
a way that it can help you pay off all the debts that you owe in a way that is easier for you
to manage without adding more to your debts. In some cases, a shorter payment period
will be the best option because if you pay off the debt quicker you will end up paying lesser
in interest charges. There are some cases as well where a longer repayment plan will be
more helpful in allowing you to pay up your debts at an amount you can afford every month
until you can get back on track financially. The longer time, however, might add up interest
charges, so again do the math to see if it will cost you more than if you just paid your debts
at a shorter time.

Take into account all these factors to help you figure out if debt consolidation Toronto may
be a good decision for you. If these factors are equally applicable to your financial
circumstances, it is possible to manage your debts successfully through consolidating.