Consumer Proposal: How It Works

How does a Consumer Proposal work?

If you have decided that you want to become debt free and build a better future for yourself, you need to start by meeting with a licensed insolvency trustee who will review your personal financial situation. Together we will determine what you can realistically afford to pay each month to your creditors and figure out your options.   

In sum, if you decide a Consumer Proposal is right for you, the monthly payment is divided among all of your creditors so that all of your creditors are receiving a portion of your monthly payment on a regular basis.  A proposal to your creditors will normally include a settlement of your total debt that is far less than what you actually owe to the creditors. 

In other words, your proposal may be to pay your creditors 30% – 40% of what you owe but the amount is payable over a period of a few years with no interest.  The reason for not paying the interest is that it allows the total of your monthly payment to be applied directly to principal.  We often hear the phrase: “I have been making payments for years but my balance never seems to decline”. The interest and late payment charges by your creditors makes getting ahead extremely difficult.  If you are serious about getting out of debt and starting over, please contact us today.

For a free initial consultation at any of our offices, please contact the Licensed Insolvency Trustees Rumanek & Company (416) 665-3328 or visit us at www.rumanek.com

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