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Financial trouble isn’t something that most people expect. After all, people generally follow the same trajectory in life: get a job and make money to provide the life you want for yourself and your family.
While nobody plans to have money troubles, life happens. There are many circumstances you may find yourself in that are out of your control, like job loss or loss of income, injury, and illness. We know that 70% of situations that cause financial trouble are unforeseen and often not planned for. So what can you do to overcome financial stress when you’re in over your head? There an alternative to bankruptcy you may have overlooked.
Bankruptcy is the number one way to get rid of debt when it becomes insurmountable. But, bankruptcy isn’t the only option – and sometimes, it’s not the best option. While considering bankruptcy can eliminate debt and give you a fresh start, it has a negative impact on your credit rating, it can delay your ability to obtain future credit, and you may be required to potentially surrender assets, and more. So how can you avoid bankruptcy to eliminate debt? Is there a real bankruptcy alternative? The answer: Yes. It’s a Consumer proposal.
A consumer proposal is an alternative to bankruptcy. It’s a solution that involves renegotiating what you owe to your creditors, handled by Licensed Insolvency Trustees on your behalf.
Think of it as a single negotiated settlement between you and your creditors on terms you both agree on. All creditor action including collection calls and interest charges are stopped, giving you immediate peace of mind again.
Consumer proposal is simple: You pay what you can afford in monthly payments with up to five years to pay, instead of what your creditors were demanding. This locked in amount allows you to know exactly what is owed so you can make manageable payments and get on with your life.
Consumer proposals can only be obtained through the help of a Federally Licenced Insolvency Trustee like Bromwich+Smith, and this service is paid by a government tariff.
The process starts with a free consultation to establish the details of your current financial situation in order to work within your budget to determine the terms of a consumer proposal. Once terms are accepted by you and the proposal is submitted, relief is in sight. Creditors will then vote to accept the current terms or amend the proposal to terms that are satisfactory for the majority. As long as a proposal offers your creditors more than they would receive in a bankruptcy, they are usually accepted.
If you can identify with any of the following, a consumer proposal might be the right alternative to bankruptcy: Consider this route if you:
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While all cases are unique, a debt relief specialist can assess your financial situation over a confidential, nonjudgmental and unbiased no obligation free consultation to recommended which debt relief solution may be best for your unique situation.
Life after a consumer proposal can be stress-free and fullfilling. Let us lead the way!
Contact us today with questions or to book your consultation.
We’ll find the right solution for you and get you back on track to rebuilding your worth.
1. What is a consumer proposal, and how does it differ from declaring bankruptcy? A consumer proposal is a formal agreement between you and your creditors to repay a portion of your debts over a set period of time. Unlike in a bankruptcy, you are not required to liquidate your assets, and the impact on your credit score is generally a lower rating. A Consumer proposal can take up to 5 years to pay off, where the length of time for a bankruptcy can be as little as nine months.
2. How does a consumer proposal affect my credit score, and for how long? A consumer proposal will negatively impact your credit score, but the exact impact and length of time it stays on your credit report will depend on your individual circumstances. Typically, a consumer proposal will stay on your credit report for three years after it is completed.
3. What types of debts can be included in a consumer proposal? Most unsecured debts, such as credit card debt, personal loans, and medical bills, can be included in a consumer proposal. However, secured debts such as mortgages or car loans cannot be included. Student loan debt can only be included if the loan is older than 7 years. A Licensed Insolvency Trustee will be able to walk you through your debt, and what qualifies for debt relief.
4. Can I keep my assets, such as my home or car, if I file a consumer proposal? Depending on your individual circumstances, you may be able to keep some of your assets, such as your home or car, if you file a consumer proposal. However, the specific terms of your proposal will vary depending on your individual situation.
5. What happens if I miss a payment or cannot fulfill the terms of my consumer proposal? If you miss a payment or cannot fulfill the terms of your consumer proposal, it may be cancelled and you may be required to file for bankruptcy. Talk to your Licensed Insolvency Trustee before your payment is due if you are unable to make payment to arrange alternative payment plans.
6. Will my employer or creditors be notified if I file a consumer proposal?
Your employer will not be notified if you file a Consumer Proposal or Bankruptcy.
7. Are there any restrictions on what I can do with my finances while I am in a consumer proposal? While you are in a consumer proposal, you will be required to make payments according to the terms of the proposal. You may also be restricted from taking on new debt without the permission of your Licensed Insolvency Trustee. You may find it more difficult to obtain credit, or will be suspetable to higher interest rates. You are able to rebuild your credit during your consumer proposal and your Licensed Insolvency Trustee can help guide you through this.
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By Taz Rajan Community Engagement Partner at Bromwich+Smith
Taz has been in the finance industry for nearly 2 decades and has always been passionate about education and empowerment. Having declared bankruptcy herself, she intimately understands the shame, stigma surrounding matters of debt as well as the joy and relief that comes from restructuring. Taz actively works to normalize the conversation of debt through blogs, media interviews, webinars, lunch & learns and through building relationship.
Hi Warren, we can help!
Please take advantage of our Free Consultation. During your consultation, you will talk to one of our Debt Relief Specialists who will look at the details of your financial situation with you. Using these details, our specialist will go over the options available to you and recommend whether one of our restructuring programs would be best for your situation or recommend other programs available from our partners in the community.
You can schedule you Free Consultation here: https://www.bromwichandsmith.com/contact-us
I would like to say thank you for all the help during this process. Your constant reassurance and excellent way of explaining what happens throughout the consumer proposal put me at ease. I kept putting this off and if I had known what it was going to be like, I would have done this a year or two ago. I'm sure you hear this all the time but again, thank you and you have changed my life for the better. Now, I can move on and actually have things to look forward too, rather than drowning in debt.
- Kenneth J.