Filing a consumer proposal is an ideal step you can take to protect important assets that otherwise might be liquidated in bankruptcy. A consumer proposal is a legal statement that is negotiated between you and your creditors to avoid bankruptcy.
It is when you offer a certain repay percentage of what you owe and also the creditors agree to let go of the remainder of your debt. Whether you analyze consumer proposal Toronto or consumer proposal Canada, it has become popular as an alternative to bankruptcy.
Best Advantages of a Consumer Proposal Toronto
Disadvantages of a Consumer Proposal
Eligibility Criteria for filing a Consumer Proposal
Your total consumer debt has to be $250,000 or less to be eligible to file a consumer proposal. All the debt is other than a mortgage on your primary residence. $1,000 of the debt is the minimum amount to consider here. Also, you have to be unable to pay the debts.
A consumer proposal features unsecured deals including :
Why Would Your Creditors Agree?
Your creditors have to agree to your consumer proposal offer in order to proceed further. It is not automatic. You and your creditor, approval from both sides require legally binding. People may ask why a creditor would agree to allow that you pay less than you owe. Well, if they get offered more money than what they will receive from the bankruptcy, most likely chances they would say yes.
Then it further raises the curiosity why would they file a consumer proposal if it means to pay more than bankruptcy. The first reason which is much apparent is the bankruptcy means losing your crucial assets such as a house or car. It also means the uncertainty of surplus income whereas consumer proposal Canada gives you a different route to start fresh from your debts.
How Your Consumer Proposal Affect Your Credit?
A consumer proposal will remain on your credit profile for a maximum of 6 years from the date you have filed. It will be removed either 6 years from the date you have filed or 3 years from the date of its completion. In Toronto, most consumer proposals are for a 5-year term so it will be removed just after one year of its completion. Even during the proposal, you can rebuild your credit score effectively.