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Let’s first define a consumer proposal before moving on to the requirements for eligibility. You can negotiate a settlement with your creditors through a legal procedure known as a consumer proposal under the Bankruptcy and Insolvency Act. The settlement is frequently less than the entire amount you owe and is determined by your ability to pay.
By filing a consumer proposal, you are effectively informing your creditors that you are unable to pay your debts in full but would like to provide a fair settlement instead. Together with you, your LIT will draft a plan that is reasonable for both you and your creditors.
You will be obliged to pay your LIT on a regular basis over time if your creditors approve your plan (usually up to five years). These payments will be distributed to your creditors by your LIT. Your remaining debts will be dismissed once you have completed all necessary payments, and you will be debt-free (with the exception of any debts that are not included in the proposal, such as student loans or child support payments).
So, in Canada, who qualifies for a consumer proposal? The eligibility criteria for a consumer proposal are fairly straightforward:
If you meet these criteria, you are most likely eligible to submit a consumer proposal. It is important to keep in mind nonetheless that not all debts are eligible for inclusion in a consumer proposal. Secured debts (such as a vehicle loan or a mortgage), student loans with a maturity date of fewer than seven years, and any court fines or penalties are excluded from the debt calculation.
Now that we’ve discussed who qualifies for a consumer proposal, let’s look at how it can help you get out of debt.
When you submit a consumer proposal, you are effectively settling with your creditors. You might be able to settle your debts for less than what you owe because of this. For instance, you might be able to settle for $25,000 if your credit card debt totals $50,000.
When you submit a consumer proposal, your creditors are legally obligated to halt any legal action and collection calls. This may provide you with the much-needed break from the pressure and worry that comes with having to deal with debt collectors.
When you submit a consumer proposal, your possessions are protected from creditors’ claims. Hence, you can maintain your house, car, and other valuable assets.
If bankruptcy is something you are contemplating as a solution to your financial problems, a consumer proposal could be a better choice. A bankruptcy has detrimental long-term effects, including a negative effect on your credit score. You might be able to prevent these repercussions by making a consumer suggestion.
Your remaining debts will be discharged after your consumer proposal is finished and all mandatory payments have been made. Hence, you will be debt-free (except any debts that were not included in the proposal).
A consumer proposal might be an effective way to get your finances back on track if you are dealing with debt and fulfill the qualifying requirements. You might be able to settle your debts for less than what you owe, cease collection calls and legal action, safeguard your assets, and stay out of bankruptcy by reaching a settlement with your creditors based on what you can afford to pay.
We at National Debt Relief are aware of the daunting and stressful nature of dealing with debt. In order to identify the best answer for your particular situation, our experts can assist you in exploring your options, including consumer proposals. To find out more about how we can help you achieve debt relief and financial freedom, get in touch with us right away. Call us at (1-800-300-9550)
We are a team of expert debt specialists that provide FREE CONSULTATION to our clients.
To know more what you can benefit from our Ontario Debt Relief Program, simply try our Debt Consolidation Calculator below and one of our debt specialists will get in touch with you and provide you the best debt relief option that fits your situation.
No contact details required to find out if you qualify
We will help you reduce as much as 75% of your debts and consolidate it into a single affordable monthly payment. Your creditors will stop harassing you and all interest will freeze if you get into our Ontario Government Debt Relief Program.
Many Ontarians are already benefiting from our Debt Relief Program, YOU should too!
Find out how much you can write off portion of your debts by getting your Free Savings Estimate below. A debt specialist from National Debt Relief Services in Ontario will discuss all options and provide you tailor-fitted Debt Relief Program.
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No contact details required to find out if you qualify
A Debt Consolidation is a negotiated debt settlement offer made between you and your creditors with the help of a Debt Relief Agency in Ontario. Some key benefits of Debt Consolidation are interest-free program, no upfront fee required, combined monthly payment into one affordable amount, no lawsuits, and many more.
Yes, your assets are safe from creditors. A licensed debt relief agency in Ontario will help you come up with an offer to your creditors that will make sure your assets will be out of the paper.
No, in fact, this is one of the great advantages of a Debt Consolidation Program. All wage garnishment will stop from the day you filed the proposal.
The effect on your credit score is not going to be severe. Your credit score will most probably go to R7 Rating and will remain in your credit report for another 3 years after you completed the program. This means that it will not be permanent and you will still be able to rebuild your credit score.
This varies depending on the proposal you will be discussing with the help of a certified debt relief agency. It is also worth noting that debt consolidation cannot exceed more than 5 years.
If a debt is shared, you need to file a joint debt consolidation offer to your creditors. However, in most cases, in which the debts are individually incurred will have no impact on your spouse.
After three missed payments, your debt arrangement with creditors will be broken and you will end up getting chased again for the original debt amount plus interest.
A debt consolidation offer can be paid off earlier if you can. In this way, you receive your “Certificate of Completion” sooner and you can immediately start rebuilding your credit score.
National Debt Relief Services Ontariois a certified Canadian Debt Relief Agency that offers FREE CONSULTATION to your debt consolidation needs. We value the trust given to us by our clients by making sure your personal information is confidential and private. Our personalized plans are designed to tailor fit your financial capacity. Our specialists will get in touch with you by simply answering a few questions thru the link provided below.
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