DEBT RELIEF OPTIONS IN THORNHILL
Consumer Proposal
A consumer proposal is one of the most effective solutions to managing multiple debts, from credit card debt to tax liabilities and personal loans.
If you’re struggling to meet your financial commitments, don’t qualify for debt consolidation, or find that your total debts exceed your assets, a consumer proposal could be a suitable solution. This legally binding agreement with your creditors simplifies your debt management by consolidating your debts and reducing the total amount you owe.
Our Licensed Insolvency Trustees (LIT) will collaborate with you to evaluate your financial circumstances and determine if a consumer proposal is the right option. The LIT will then craft a manageable monthly payment plan and present it to your creditors for approval. Once accepted, the proposal becomes legally enforceable, allowing you to make payments directly to the LIT. After fulfilling the terms of the proposal, any remaining eligible debt is forgiven.
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
Please 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 popular debt management option for many Canadians, offering both advantages and disadvantages. When payments are made on time, it usually does not affect your credit score. However, drawbacks include the high interest rates often associated with consolidation loans and the risk of maintaining other high-interest accounts.
On the other hand, while a consumer proposal does impact your credit score, it comes with significant benefits. These include the possibility of reducing your debt by as much as 75%, protection from legal actions and collection efforts, and a halt to interest accumulation on the debts covered by the proposal.
Personal Bankruptcy
Personal bankruptcy is often viewed as a final option after exploring other debt-relief alternatives. While it provides a quick and affordable method to eliminate debt, it comes with significant impacts on your credit score and assets. Nonetheless, in certain situations, it may be the most viable solution.
