A Consumer Proposal is a viable solution to file bankruptcy without the fear of losing assets. It is a legally binding contract negotiated with your creditors via a Licensed Insolvency Counselor. Once submitted, a stay of all proceedings that gives you temporary legal protection from debt collectors and creditors. Once your creditor agrees to such a plan, you are still legally obligated to repay your debt.
With this alternative, you make one monthly payment to the Licensed Insolvency Counselor who distributes it to your creditors. Payments may be made on a weekly basis or bi-weekly. This payment amount can then be distributed equally among your unsecured debts. The Consumer Proposal allows you to negotiate your debts without having to declare bankruptcy. You also have the right to defer your payments until you reach an agreed upon debt amount.
This option has several advantages. If your unsecured debts total over ten thousand dollars, the Consumer Proposal can be your means to wipe out up to forty percent of your debt. With an asset, you will get additional tax relief for your surplus income. The remaining balance will be given to the Licensed Insolvency Counselor for distribution to your creditors. You also avoid incurring any penalties for bankruptcy by paying off your debts as a group.
The Licensed Insolvency Counselor receives payment from the creditor who agrees to accept a deal. In most circumstances, creditors agree to the plan offered by the Licensed Insolvency Counselor and file paperwork with the courts to approve the debt proposal. The Consumer Proposal then goes to the court for approval and signing of the document. Once approved, creditors immediately stop all collection activities and the stay is effective.
The Consumer Proposal protects you from future problems associated with filing for bankruptcy. You are not required to liquidate your assets to repay the debt. Creditors may keep some of your assets, however, they will not require you to repay them. This ensures that your debts do not accumulate and result in bad credit ratings for at least five years.
The Consumer Proposal for debt consolidation is a great option for many individuals. It is available to you even if you currently have no outstanding debts. It is important that you consult a professional before filing for bankruptcy. They will be able to assist you with the requirements and paperwork that you need to meet. By taking advantage of the Consumer Proposal, you will ensure that you avoid the long term negative effects of filing for bankruptcy.
Get further info by browsing this link - https://www.dictionary.com/browse/debt
