A consumer proposal is a formal, legally binding process that consists of an offer to pay creditors a percentage of what is owed to them, or extend the time you have to pay off the debts, or both.
Advantages of a Consumer Proposal:
- You are able to retain your assets (vehicle, home, investments, pensions, etc.).
- A portion of your debts can be forgiven (discharged)
- It protects you from legal action (collection action and garnishees)
- No interest while in a proposal
- A Consumer Proposal can be up to 5 years in length and can be paid off early with no penalty
- All unsecured creditors are legally required to participate
- Potential for less impact on your credit rating than a Bankruptcy (3 years after completion versus 7 years after discharge)
Disadvantages of Consumer Proposal:
- Negatively affects your credit and the record of a consumer proposal stays on your credit report for 3 years after you’ve completed your proposal
- A proposal can be annulled and your debts will return (plus interest) if you are ever 3 payments in arrears
Are you ready to be debt free?
Debt Relief Canada provides individuals across Canada with solutions to reduce and eliminate debt.
Contact us for a free, no obligation consultation.
Toll Free: 1.855.305.9940