Debt consolidation with consumer proposals

Debt Consolidation With Consumer Proposals

Voluntary deposit, debt consolidation, consumer proposals, and bankruptcy, are some of the viable options for someone who wanted to pay off their debt. Let’s talk about debt consolidation with consumer proposals.

Consumer Proposals vs. Debt Consolidation

Basically, with a consumer proposal, it is an offer that you make to pay off all your creditors. Usually, you will both agree to a fixed monthly payment. This process is that you will just pay a portion of what you owe. It will be a win-win for both of you and your creditor. 

This might too simple to believe, but this process is formal and the debt payment agreement here is legally binding. There is a professional that is recognized or tasked by the government. A Licensed Insolvency trustee Red Deer is the only one to administer and file for consumer proposal so you know that you are in good hands.

Debt consolidation, on the other hand, is about getting a big loan to pay all of your small loans. It is still about increasing your leverage with the main goal of lowering the interest rate.  Instead of getting stuck on debts for too long, with this, you get to pay off faster your smaller loans by getting a new one but with a lower interest rate.

It may work for some, but it might not be good for many. Well, you are still giving yourself another reason to get stressed.  With debt consolidation, you really didn’t get out of the debt – actually, you have just prolonged it since this a big one. So, if you were to ask people about the better option, they will be picking consumer proposals. To clarify your best option it is best to call one of our insolvency trustee Red Deer based professionals.

Consolidating Your Debts With Consumer Proposal

Is it possible? 

Yes, you can still be able to file for a proposal for you to have consolidated monthly payments. However, the payments that will be made monthly will just be lower. It is because you have made an agreement to repay only a part of the debt. Shaving this option, it is like combined benefits that you will get from debt settlement and debt consolidation.

Why should you choose a consumer proposal? Well, there a couple of reasons why you should be choosing it over the option of debt consolidation. These are:

•  It allows you to deal with all of what you owe

•  It is interest-free

•  You get to pay off your debt for a lower amount than the total debt 

•  No security needed and you will not lose your assets

While it might be easy for some to take a new loan to repay their old loan well, it’s easy, but it isn’t a good solution. While some of the debt options mentioned earlier in this article may work on your friend with his loan, it might not work for you. Instead of getting into debt again, why not choose an option that will help you pay all of your small debts in one single payment?

If you want to consolidate all of your small debts and just pay it at a lower amount every month, a consumer proposal may be the key. To understand all of your options call one of our trusted Red Deer insolvency trustees today!

Source: https://Insolvencytrusteereddeer.c