DEBT RELIEF OPTIONS IN CAMBRIDGE
Consumer Proposal
A consumer proposal offers an effective solution for managing multiple debt challenges, whether you’re dealing with credit card debt, tax liabilities, or personal loans.
If you’re unable to meet your financial obligations, don’t qualify for debt consolidation, or your total debt outweighs your assets, a consumer proposal may be an ideal option. This formal agreement between you and your creditors consolidates your debt and reduces the amount you need to repay.
Our Licensed Insolvency Trustees (LIT) will work closely with you to assess your financial situation and determine if a consumer proposal is the best approach. The LIT will then develop an affordable monthly payment plan and submit it to your creditors for approval. Once approved, the proposal becomes legally binding, and you’ll begin making payments to your LIT. Upon completing all terms of the consumer proposal, any remaining 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 common debt management strategy for many Canadians, offering both benefits and drawbacks. When payments are made promptly, it typically has no impact on your credit score. However, high interest rates on consolidation loans and the potential to keep other high-interest accounts active are significant downsides.
Conversely, a consumer proposal does affect your credit score but provides substantial advantages, such as potentially reducing your debt by up to 75%, shielding you from legal actions and collection calls, and stopping interest from accumulating on the included debts.
Personal Bankruptcy
Personal bankruptcy is typically seen as a last-resort option once other alternatives have been considered. While it offers a fast and cost-effective way to eliminate debt, it has considerable effects on your credit score and assets. However, in some cases, it may be the only practical solution.
