One of the advantages of filing a consumer proposal is that your monthly payments are often less than they might be in a bankruptcy. This means you can use your extra cash flow any way you like, including continuing to make contributions to an RRSP. This might be particularly attractive to you if your employer matches your RRSP contributions. But what if you’ve built up some savings in your RRSP, enough to pay off your…
Consumer Proposal: Canada's #1 Alternative to Bankruptcy
A consumer proposal is the only debt settlement program administered by the federal government. It was introduced into the Bankruptcy & Insolvency Act as an alternative to bankruptcy for individuals who are struggling with debt payments but do not want to file bankruptcy.
A consumer proposal gives you protection from your creditors while you make a deal to repay a portion of your debts. You pay only what you can afford. Your creditors get more than they would in a bankruptcy. It’s a win-win for both you and your creditors.
The only way to file a Consumer Proposal is through a licensed Consumer Proposal Administrator. Your administrator is also a licensed bankruptcy trustee since both procedures are governed by the federal government through the Bankruptcy & Insolvency Act. If your counsellor is not a trustee, they cannot file a Consumer Proposal for you.
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Avoid Filing Bankruptcy – Compare Your Options
You don’t want to go bankrupt but are confused about your options. Each have different advantages and disadvantages and we recommend you compare each alternative carefully to see which might be best for you. In Canada, you may choose to consolidate your debts through a debt consolidation loan, refinance with a second mortgage, talk to a credit counsellor about a Debt Management Plan or settle your debts through a Consumer Proposal.
A Consumer Proposal Administrator is required by law to discuss all of these alternatives with you.
Compare Your Options
Do you want to avoid bankruptcy, but you don’t qualify for a debt consolidation loan, and you can’t afford a debt management plan through a not-for-profit credit counsellor, and you don’t trust those for-profit debt consultants who promise to eliminate your debt for very little cost? Then a consumer proposal is for you, and that’s why a consumer proposal is the #1 alternative to bankruptcy in Canada. Why should I try to avoid bankruptcy? Filing bankruptcy is…
Statistics just released from the Office of the Superintendent of Financial Institutions show than Canadians, more than ever, are working out their debt problems by filing a Consumer Proposal rather than going bankrupt. Today more than half of all insolvency filings in Ontario are a proposal made to creditors and the trend is increasing across the country. There are we believe several reasons as to why a consumer proposal is seen as the option of…