Consumer Proposal Vs Bankruptcy
With every loan applied for and approved, it comes with a big responsibility. Everyone knows it That are involved, especially the debtor him/herself and what they owe their creditor, it should be returned. How? The main solution to this is to pay off all the debts. But what if you weren’t able to do so? Luckily, there are still available options; you either file for bankruptcy or file for a consumer proposal.
Which is the suitable option for you? Let’ look more closely into these two options.
Knowing More About Consumer Proposal
When we talk about the Consumer Proposals. It is a formal and legal process of paying off all of your debts from your creditor. It is a debt payment arrangement that is made between you and the creditor and will be filed by a Licensed Insolvency Trustee Red Deer. Through this process, you will be given ample time of typically five years to pay off a portion of your debt. It may be unbelievable to some, but this debt arrangement is true, legally binding, and is recognized by the Canadian government.
The government has recognizes one professional, the Licensed Insolvency Red Deer Trustee, to file for this said proposal. The trustee will negotiate on our behalf with the creditors in terms of your debt repayment. Your trustee will conduct an initial assessment and make payment plans to make sure that it is affordable and will ensure payments will be made. As it is legally binding, once this proposal has been filed and accepted. You are guaranteed protection from creditors – wage garnishment and debt interests will be stopped.
Same as the Consumer Proposal, bankruptcy is also a structured legal process that will enable you to have a debt-free life sooner rather than later in many cases. There will also be a Licensed Insolvency Trustee Red Deer that will be assigned to you. He or she and will work on your bankruptcy claim, take control over assets, research on your affairs, and monitor one’s progress when it comes to bankruptcy duties. Talking about duties, if you complete the, (including crediting counseling sessions and filing monthly reports on income and expenses). You can say goodbye to your debt records in as little as 9-21 months.
Consumer Proposal Or Bankruptcy: Which Is Best?
From these debt relief solutions, the Consumer Proposal is far more suitable than bankruptcy. It is because it only requires regular payments of the fixed amount that both of you and the creditor have agreed upon. If you can pay more for this month, it will be better. Also, it has less effect on credit score and will be on your record for three years. On the other hand, if you choose bankruptcy, your monthly payments will vary as it depends on your monthly income. It poses a severe impact on credit score and will be staying with your record for up to six years for first-timers.
However, only those who owe their creditors or have a debt consolidation more than $5,000 but less than $250,000, mortgage not included. Will be eligible to apply and file for the Consumer Proposal. This means that it will still depend on the situation that you are in right now. Perhaps bankruptcy will be a suitable option for you.