Image of a consumer proposal contract in Toronto

You hear a lot about consumer proposals in Toronto nowadays. Since, in my experience, practically nobody wants to do a bankruptcy it’s no wonder that consumer proposals have become the most talked about part of the personal insolvency business. In fact almost half the people who deal with a Licensed Insolvency Trustee like Richard Killen & Associates do a consumer proposal instead of a bankruptcy. But how do they work?

A consumer proposal works the same as a consolidation loan. Instead of having to pay 10 different credit cards every month you consolidate everything into one monthly payment. Overall it is often cheaper and it certainly takes away the stress and frustration of dealing with a bunch of different payments every month.

With a consumer proposal however, you don’t have to borrow any money. Getting a loan might not be easy. The lender may want collateral, or a co-signor, or maybe your credit rating has deteriorated. With a consumer proposal you don’t have any of these problems. You can consolidate everything into one monthly payment simply be filing a consumer proposal through a Licensed Insolvency Trustee like Richard Killen & Associates. It must be done with a Licensed Insolvency Trustee.

A consumer proposal is a legal settlement offer you make to all your creditors -combined. Some people have the means to offer enough to pay their creditors the full amount they owe them. Others do not have those means, so they offer what they can afford. Usually the creditors accept a lesser amount if they see it is the best you can do.

The trick is to make sure you will be able to make the payment every month. A consumer proposal i s limited to a term of 60 months. Say you owe $30,000.00 in credit cards and you can’t keep up the combined monthly payments. You determine that, with the utmost budgeting, you can afford a maximum payment of $400 a month. OK, you make a consumer proposal offering
$400 for the full60 month; which comes to $24,000. It isn’t 100% of what you owe, but it may be acceptable to your creditors. They will determine their own best interests, but they may decide to accept it if they think you are doing your best and they see it is generally the best they will likely get. No matter the reasons, you can find yourself paying off your creditors in a way you can afford.

A consumer proposal is not magic, but it is a bona fide alternative to a bankruptcy and like I said earlier, over the last few tears it is being used almost as frequently as a bankruptcy by people in debt trouble looking for a solution.

So if you want to find out if this is for you call or email Richard Killen & Associates for a FREE consultation. It may be the most stress-relieving call you ever make.

Richard Killen
Licensed Insolvency Trustee