DEBT RELIEF OPTIONS IN PICKERING, ONTARIO
What is a Consumer Proposal?
A consumer proposal is a legally binding agreement between you and your creditors to repay a percentage of what you owe in exchange for complete debt forgiveness. A consumer proposal is a proceeding under the Bankruptcy and Insolvency Act administered by a Licensed Insolvency Trustee. If you struggle with monthly debt payments, a consumer proposal plan relieves debt while avoiding bankruptcy.
A Consumer Proposal is a legally binding agreement between you and your creditors, federally regulated and overseen by the Office of the Superintendent of Bankruptcy. It provides an alternative to declaring personal bankruptcy and is exclusively administered by a Licensed Insolvency Trustee (LIT) under the Bankruptcy and Insolvency Act. In the consumer proposal, you agree to repay a percentage of what you owe to your creditors in exchange for complete debt forgiveness, allowing you to alleviate unsecured debt by up to 80%.
In your meeting, the LIT will thoroughly review your financial situation and determine if a consumer proposal is the best option. They will calculate the monthly payment you can afford and present the proposal to your unsecured creditors. If they accept the proposal, it will make the agreement legally binding. While the Consumer Proposal allows a maximum repayment period of five years, you retain the flexibility to settle it earlier. Another benefit is that it will immediately stop all legal actions against you, including wage garnishments or intrusive calls from collection agencies.
Beyond the considerable debt reduction, a Consumer Proposal can result in reduced monthly payments, stopped interest charges, and the consolidation of unsecured debts into a singular monthly payment.
What Debts are Covered in a Consumer Proposal?
A consumer proposal includes most unsecured debts, which include various debt types not secured by assets like a house or car, so you cannot include a mortgage or car loan. Typically, the following can be included in a consumer proposal:
- Credit card debt
- Personal loans, including lines of credit, consolidation, or renovation loans, provided no assets secure the debt.
- Payday loans
- Student loans, if you ceased to be a student at least seven years ago
- Income tax debt, encompassing amounts owed for personal income tax (including penalties and interest), GST debts, Canada Child Benefits overpayments, CPP, and OAS overpayments.