DEBT RELIEF OPTIONS IN PETERBOROUGH, ONTARIO
Consumer Proposal
A consumer proposal can be one of the most effective strategies for addressing overwhelming debt, whether it’s credit card debt, tax debt, or personal loans.
This option may be suitable if you’re unable to qualify for a debt consolidation loan, can’t repay your total debt, or if your debt exceeds the value of your assets.
A consumer proposal is a legally binding agreement between you and your creditors that consolidates your debt and allows you to settle it for less than what you owe. Working with our Licensed Insolvency Trustees (LIT), you will evaluate your financial situation to determine if a consumer proposal is the best course of action. We will then determine a manageable monthly payment amount. Your LIT will submit this proposal to your creditors for approval. Once accepted, you will make monthly payments, and upon completion of the terms, the remaining debt will be discharged.
The primary advantages of a consumer proposal include:
- Discharging up to 75% of your debt
- Halting all legal actions, such as wage garnishments or frozen bank accounts
- Stopping all collection calls
- Retaining all assets, including tax refunds
- No additional interest on any debt included in the proposal
Please note that only Licensed Insolvency Trustees, such as those at Chande Debt Solutions, are authorized to file consumer proposals in Peterborough.
Debt Consolidation vs. Consumer Proposal
Many Canadians weigh the pros and cons of debt consolidation versus a consumer proposal. While debt consolidation in Peterborough can preserve your credit score (provided payments are made on time) and allows you to deal solely with your financial institution, it also has significant drawbacks.
Personal or home equity loans often come with high interest rates, and depending on your credit and payment history, you may not qualify at all. Additionally, with a consolidation loan, you may retain high-interest credit cards and other accounts, meaning that underlying financial issues may persist without changes to your spending habits.
In contrast, although a consumer proposal will impact your credit score and only covers unsecured debts (such as credit card debt, personal loans, tax debt, or possibly older student loans), it offers substantial benefits. These include the ability to discharge up to 75% of your debt, stop all legal actions and collection calls, and halt any further interest on the debts included in the proposal.
Personal Bankruptcy
In some cases, personal bankruptcy may be the only viable option. Typically considered a last resort when all other avenues have been exhausted, bankruptcy provides a fast and cost-effective solution to debt problems. However, it comes with severe consequences, including a significant impact on your credit score and the loss of any non-exempt assets. Let Chande Debt Solutions be your bankruptcy trustee in Peterborough!
