DEBT RELIEF OPTIONS IN AURORA
Consumer Proposal
A consumer proposal is a very effective way to address multiple debt issues, whether you are struggling with credit card debt, tax liabilities, or personal loans.
If you cannot meet your financial obligations anymore, don’t qualify for debt consolidation or your total debt exceeds the value of your assets, a consumer proposal could be the perfect solution. A consumer proposal is a formal agreement between you and your creditors that consolidates your debt and reduces the amount you must repay.
Together with you, our Licensed Insolvency Trustees (LIT) will review your financial situation to determine if a consumer proposal is the best option for your situation. Then, the LIT will create a monthly payment plan you can realistically afford and submit it to your creditors for approval. Once that is obtained, the proposal becomes legally binding and you will start making your monthly payments to your LIT. Once all terms of the consumer proposal are completed, the remainder of your debt is discharged.
The most significant benefits of a consumer proposal include:
- Discharge of up to 75% of your debt
- Halt to all legal actions, such as wage garnishments or frozen bank accounts
- Cease all collection calls
- Retention of all assets, including tax refunds
- No additional interest on debts included in the proposal
It’s crucial to note that only Licensed Insolvency Trustees (LIT), like Chande Debt Solutions, are authorized to file consumer proposals.
Debt Consolidation vs. Consumer Proposal
Debt consolidation is a widely used debt management strategy among Canadians, with both advantages and limitations. When payments are made on time, it generally doesn’t affect your credit score. However, high interest rates on consolidation loans and the risk of keeping other high-interest accounts open are notable drawbacks.
In contrast, a consumer proposal does impact your credit score but offers significant benefits, including the possibility of reducing your debt by up to 75%, protection from legal actions and collection calls, and relief from accumulating interest on covered debts.
Personal Bankruptcy
Personal bankruptcy is generally considered a last resort after other options have been explored. Although it provides a quick and affordable solution for eliminating debt, it carries significant implications for your credit score and assets. Nonetheless, in certain situations, it may be the only feasible option.
