If you’re thinking about an alternative to personal bankruptcy, then think consumer proposals in Toronto. There are many similarities to bankruptcy but there are some significant differences.
Just like in bankruptcy, a licensed Bankruptcy Trustee or consumer proposal administrator negotiates the arrangement with your creditors on your behalf. With a consumer proposal in place, you’ll have immediate protection from your creditors – they can’t call you to collect and they can’t garnishee your wages.
With a consumer proposal, interest stops accumulating on your loans, and you won’t lose your house or other assets. And you don’t have to surrender all of your assets to a Bankruptcy Trustee. You only have to repay a portion of what you owe and you have up to five years to repay your creditors. You only owe what is in the consumer proposal, nothing more. If your income increases, your payments will not change.
There are consequences for residents of Toronto or anywhere in Canada for that matter when they consider a consumer proposal. The negative rating on your credit score for bankruptcy is R9 and R7 for a consumer proposal. For comparison, when you pay your creditors on time, your score is R1. The consumer proposal stays on your record for three years after your repayment period. So if you repay your creditors in the maximum allowable time of five years, the consumer proposal remains on your credit report for eight years. But if your trustee negotiated a repayment plan of two years, then the consumer proposal remains on your credit report for five years.
Creditors would rather work with you in a consumer proposal than see you go bankrupt. They have more chance of receiving a payment from you with a proposal versus a bankruptcy. You can set up a variety of payment terms based on your income. Seasonal workers may set a repayment schedule to coincide when they get paid. You can do a fixed payment amount for a fixed term or you can do a payment plan where payments either increase or decrease over time. However, if you lose your job and are unable to pay, if payment is not received on the date that the third monthly payment is due then your consumer proposal is annulled.
Drop into our Toronto office and understand the benefits and consequences for you of using a consumer proposal as a debt solution. There is no fee for a consultation and it just may prove to help you sort out what action you need to take.
The Toronto office of Richard Killen & Associates is located at Danforth & Main, at the Main Street subway stop on the East/West Danforth line. We share space with a well-known solicitor whose firm has been providing legal services to the area since 1941.
Call us at 1-888-545-5365 or drop by our offices at 2600 Danforth Avenue, M4C 1L3
For consumer proposals in Toronto, Richard Killen & Associates could be the most stress relieving call you’ll ever make.