If you are in the process of considering options to deal with your debt, you may have come across the idea of a Consumer Proposal. But if you are like most people, you may not know a lot about Consumer Proposals, if anything at all.
At Frendo and Partners it is our business to explain to you not only what a Consumer Proposal is, but also what it’s not.
A Consumer Proposal is not bankruptcy. Although a Consumer Proposal can only be filed through a Licensed Insolvency Trustee, unlike a bankruptcy you are not assigning or surrendering assets to the Trustee. For example, a Consumer Proposal allows you to keep your home.
A Consumer Proposal is not an “easy way out.” Most Consumer Proposals involve determining what your income is on a monthly basis and then, after allowing for living expenses, calls for a significant portion of the remaining disposable income to be paid to your creditors via the Consumer Proposal over an extended period of time not to exceed 5 years.
A Consumer Proposal is not complicated. Once all of the information is gathered, a Consumer Proposal can be prepared and submitted relatively quickly. In fact, the concept was first introduced by the government to eliminate many of the complications and hurdles individuals faced with a bankruptcy or other insolvency proceedings.
So what is a Consumer Proposal?
A Consumer Proposal is an agreement put together by you and a Licensed Insolvency Trustee which ‘proposes’ a monthly repayment plan to your creditors, based on what you can afford to pay on a regular basis to pay down your outstanding debts. It is a legal process, provided by the government, which allows for the potential restructuring and/or reduction of debt owed as an alternative to bankruptcy.
To learn more about Consumer Proposals you can either visit the Proposals section of our web site or schedule a free consultation with Frendo and Partners at your convenience.