As we say on our website, “we are dedicated to making consumer proposals succeed.” Bankruptcy can protect you from the actions of creditors however; instead of a mutually agreed payment agreement with your creditors (as found in a Consumer Proposal), conditions and payment requirements of a Bankruptcy are set entirely by the Bankruptcy and Insolvency Act of Canada. These include:
- Monthly payments based on family size and your actual monthly income until your bankruptcy is discharged. You must provide monthly income statements to the Trustee with proof of income.
- You have to submit all credit cards (including those with a zero balance) to the Trustee.
- You have to surrender certain assets to the Trustee.
A Consumer Proposal provides more flexibility for payments For example:
- Monthly payments are tailored to your situation in a plan offered to creditors.
- Voting creditors that hold the majority of the debt must first support the proposal. (For example: if the debt is $50,000, support is required from creditors who are owed more than $25,000.)
- If the proposed plan is accepted by the creditors payments are made over a maximum of five years and pay back part of the total debt, (typically 20% – 40% of the debt).
- Monthly payments are made by pre-authorized debit directly into the Licensed Insolvency Trustee’s trust account then dispersed to the creditors.
- Debt Counselling services are provided.
Before declaring bankruptcy consider the many benefits of filing a Consumer Proposal.
- Our experience is that people feel much better when they can file a proposal instead of a bankruptcy.
- You are protected from creditors, no more annoying calls. It is the law.
- Wage garnishment and harassment will stop.
- Interest payment obligation stops.
- Interest is discharged the same way as debt.
- All of your assets are protected (unlike bankruptcy, nothing can happen that you do not agree to).
- You can feel proud that you made an agreement to do the best possible for everyone affected.