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People in the city are leaning more towards Toronto consumer proposals today than ever before opposed to declaring bankruptcy according to Licensed Insolvency Trustee, Richard Killen & Associates. In fact since 2013, the number of consumer proposals filed surpassed the number of bankruptcies each year and continues to grow in popularity.

There is a negative perception to bankruptcy. It’s like the last resort for many, and declaring bankruptcy is like saying to the world that you have failed. No one wants a bankruptcy hanging over their head. That is not to say that a bankruptcy is not a viable solution for many, it is. However if one understands the difference, given the choice, most would choose the proposal as a solution to their debt.

Why Are Consumer Proposals So Popular?
Let’s start by providing an overview of what a proposal is. It is a legally binding agreement between you and your creditors that states how much you’re going to pay back to them and the payment terms. A proposal is negotiated by a licensed consumer proposal administrator or by a Licensed Insolvency Trustee and all agreements must be approved by the courts.

The amount you pay back to creditors is usually negotiated to a lower amount and is based on your current financial situation. The important point is that you only need the majority of creditors to agree to the proposal, not all. Often, creditors will accept most reasonable settlements as otherwise, they realize there is a good chance you may declare bankruptcy and the amount of money they receive could be less or even zero. A dollar in hand is always better than the possibility of nothing down the road.

They also realize that if they handed your debt over to a collection agency, they are going to receive only a small portion of the outstanding amount after paying agency commissions.

Once the proposal is approved by the creditors and the court, the amount you owe will not change. So even if your salary or wage is increased or if you come into money from an inheritance, the amount you owe will never increase.

Generally, large assets like your house or condo are not included in a proposal. Another advantage.

The above are the main reasons why proposals are gaining in popularity over bankruptcies. There are also benefits that are shared with both solutions. They are:

  • Wage Garnishments Stop
  • Interest does not accumulate
  • Creditors and collection agencies must stop calling you

Of course there is no guarantee that your proposal will be approved or that a proposal is the right solution for you.

If you’re losing sleep night after night worrying about your debt problem, it’s time to talk to a trustee in bankruptcy. Since 1992, thousands of people with debt problems have turned to Richard Killen & Associates for the right advice on how to deal with their debt.

Our Toronto location is just south of the 401 on the west side of Islington. Our address is

Richard Killen & Associates
2150 Islington Avenue, Suite 202,
Toronto ON M9P 3V4

Tel: 1 (888) 545-5365

Come in for a FREE consultation on Toronto consumer proposals and to discover your options to get back in control of your finances. A call to our office could just be the most stress relieving call you may make.