Are you looking for a trusted solution to settle your debt without going bankrupt? A consumer proposal is what you might look for in a trusted solution. A consumer proposal is a proper financial process that's structured for individuals to repay most of their debt through a stabilized process with creditors.
Introduced under the Bankruptcy and Insolvency Act, a consumer proposal allows you to negotiate on debt reduction with options to pay your debts accordingly in a yearly time frame. In this process, your monthly payment is based on your allocation and personal situation. Your debts can generally be reduced by up to 70% and sometimes even more.
In this process, only a Licensed Insolvency Trustee has the power to scroll your file of consumer proposals. Your monthly payments will be made directly to the trustee and your creditors will no longer be allowed to make collection calls. No more harassment!
In Canada, to get a green signal with a consumer proposal, reach out to a Licensed Insolvency Trustee (LIT), which is federally regulated by professionals who are professional in debt reduction. Here, the regularized body, like the Licensed Insolvency Trustee, drafts a consumer proposal detailing how the individual will pay their debt to creditors and with mortgage terms (monthly or yearly). Once a proposal is framed, it is sent to creditors to approve or reject.
Continuing with the example above, the proposal term may outline that an individual is to pay $1,500 monthly over five years. The payment is authorized and collected by the Licensed Insolvency Trustee, which is responsible for distributing cash to creditors on behalf of people who invest in the term. If the creditors reject the proposal, the individual must consider changing the plan or look at other options (such as declaring bankruptcy).
In most cases, the professional person will be paid from the proceedings of a consumer proposal. The professional’s fees are set by the office of the Superintendent of Bankruptcy.
The process of filing a consumer proposal is set to get you out of debt without facing any long-term consequences and relinquishing of assets associated with bankruptcy. That said, there will be some overall impact on your credit score which you should be aware of. This will affect your ability to borrow money for the first few years after your claim.
A consumer proposal does not affect any of your secured debt clearance, such as a mortgage term. You will still need to make your regular mortgage payments if you want to win-win with the consumer proposal.
If you, as a user, are looking for more information on the core topic of consumer proposals to clear mortgage, approvals and other core processes, never hesitate to visit our official source.