4 Pillars of Victoria Explanation of Consumer Proposals

If you have been considering bankruptcy in Canada, you should be aware of what a consumer proposal is. It is considered the top alternative to bankruptcy and has its own set of advantages and benefits. The first thing to know about consumer proposals is that they are the only debt settlement program that is approved by the Canadian government. At 4 Pillars in Victoria, we can help you get started with this solution if it fits your needs.

Benefits of a Consumer Proposal

When you choose a consumer proposal, there are some advantages when compared to bankruptcy. The first is that you end up with a single monthly payment that you will be paying into for no longer than five years. You also usually end up repaying just a portion of your total debt, rather than the entire sum. The debt settlement is negotiated by through a Licensed Insolvency Trustee, and interest is no longer charged. In addition to that, it is a legally binding proposal for both you and your creditors.

No Need to Lose Your Assets

When you go bankrupt, you may end up losing a significant amount of assets in the process. With consumer proposals, that doesn’t happen. Your assets are secure and protected throughout the process. That means that if you have investments, equity in your home, or tax refunds, those will still all be accessible to you. This can be a huge advantage depending on how your finances and assets look when choosing the process.

Lower Monthly Payments

When you choose a consumer proposal, there is a negotiation process to ensure you pay only part of the debt you owe. Some individuals find they may only need to pay 30% of the money owed, rather than the entire 100%. It is considered one of the safest options for debt consolidation available in Canada. While the consumer proposal is in effect, your interest is frozen so the amount you owe won’t continue going up.

Protection from Creditors

Because consumer proposals are a legal process filed with a Licensed Insolvency Trustee, that is an officer of the court, there are certain rules that your creditors are held to. One of those is that you will no longer have to worry about wage garnishment or collection phone calls. As soon as the proposal has been approved by the majority of your creditors, all creditors must follow that same rule.

If you want to learn more about consumer proposals, 4 Pillars in Victoria can help. You can get more information or contact us at 4pillarsdebtconsultants.ca