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.