Consumer proposal

Consumer Proposals in Toronto and How We Can Help

One of the most common debt settlement agreements in Toronto is a consumer proposal. This type of agreement must be filed with a Licensed Insolvency Trustee. In a consumer proposal, the debtor agrees to pay back a percentage of the debts in exchange for complete debt forgiveness. These proposals can have different terms but, in most cases, the debtor gets to keep all their assets.

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How do consumer
proposals work?

To start with, the debtor must agree to all the terms of payment set aside in the consumer proposal.

These payments are usually interest-free. They are often spread over several years. Most consumer proposals will last for as long as five years. Since interest is excluded from payments, the debtor can save 70% to 80% of the amount owed in a consumer proposal. At Phong Su & Associates LIT, we are a licensed administrator for consumer proposals. We negotiate the best terms for our clients based on what they can afford to pay as well as what is an offer the creditors are likely to accept. We discuss with our clients their financial position to better understand how much they are able to offer and then agree on the best way forward. Ultimately what you owe as well as your income will dictate the terms of the final agreement. Consumer proposals may be a good option for any debtor who’s struggling to make monthly payments and would like to avoid filing for bankruptcy.

How do consumer proposals work?

A consumer proposal can help you
deal with all forms of unsecured debt including

Student loans

Tax debts

Payday loans

Unsecured bank loans

Credit card loans

Unsecured lines of credit

Why choose a consumer proposal as a form of debt settlement?

There are many benefits of a consumer proposal as opposed to other options for debt relief. These benefits include:

  • A consumer proposal will stop any creditors from calling and stop any wages garnishments
  • It can be a good alternative to filing bankruptcy
  • It binds all creditors to the agreement (they will have to stick to the terms of the offer)
  • It saves you from paying interests on debts
  • It results in lower monthly payments which offer greater flexibility and a stress-free life
  • It allows you to keep all your assets as well as your home equity
  • It may reduce your overall liability by up to 80%

Do you qualify for a consumer proposal Toronto?

Consumer proposals are regulated by the Canadian government and hence there are some minimum requirements you must fulfil to be eligible for this form of debt relief. To qualify for a consumer proposal, you must:

  • Be a resident in Canada
  • Your liability (excluding your mortgage) shouldn’t be more than $250,000
  • Your debts must be higher than the value of any asset you have, or you must be unable to keep up with the monthly payments
  • You must be able to pay at least a portion of the money owed

Want to find out if a consumer proposal is a good option for you? Talk to us today.

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