Posted under bankruptcy Kitchener & consumer proposal
A consumer proposal is a deal that you make with your creditors as a way to avoid filing personal bankruptcy. A consumer proposal is a bankruptcy alternative.
In a typical consumer proposal filed in Kitchener you make a monthly payment, and that payment is distributed to each of your creditors (your credit cards, bank loans, and so on). This one monthly payment is perhaps the biggest advantage of a proposal, because now you know exactly what you are required to pay each month, and your creditors stop calling you, and they no longer can sue you or garnishee your wages.
The amount you pay each month in a proposal is based on your monthly income at the time you file the consumer proposal. Your family size and what assets you own are also factors in determining the amount you will pay each month (the more you own, the more you will be required to pay each month).
When is a consumer proposal a better option than a bankruptcy?
First, if you hope that your income will increase in the future, a consumer proposal is a great way to fix the amount you are required to pay, now, so that as your income increases your consumer proposal payment remains the same. In a bankruptcy, each month you report your income to the trustee, and as your income increases, your payment increases.
Second, in a bankruptcy you may lose your home, RRSP, or other assets, depending on their value. In a consumer proposal you can keep your assets, which makes proposals a great bankruptcy alternative.
Finally, many people I have met with in Kitchener over the years simply don’t want to go bankrupt. They know they owe the money, and simply want a solution to help them deal with their debts.
Each situation is different, so I recommend that you contact the trustee firm that has filed more consumer proposals in the last five years in Kitchener than any other firm: Hoyes Michalos & Associates. We can be reached in Kitchener at 519-747-0660, or e-mail your question, and let’s get started.
