Financing a Consumer Proposal
Well, it happened. You racked up a lot of debt and you now have to deal with it. You have
decided that you are capable of making a settlement with your creditors by offering to pay a portion of your total debt over a period of time (usually 60 months with no interest) using a Consumer Proposal. At least, you can avoid bankruptcy.
Setting up the Consumer Proposal is done with the assistance of a Licensed Insolvency Trustee (formally called a Trustee in Bankruptcy) or some other qualified person. They will review your assets, liabilities, income and expenses to come up with a plan that your creditors will be likely to accept. Beware of anyone who advertises that they can reduce your debts by “up to 80%” before they meet with you and review your specific situation. Sometimes, you might be able to make a small down payment using money in an RRSP, cash surrender value of life insurance, etc. Sometimes, your budget is not stable because you only have full time seasonal work. Construction workers, roofers, road pavers, usually only work 8 or 9 months per year and it is common to structure their Consumer Proposals over a 60-calendar month period (the maximum allowed by law) but only require that monthly payments only be made in 8 specific months each calendar year. You might also have a steady job and be able to make payments for all 12 months each year. You might want to pay off the Consumer Proposal faster than the 60 months in order to assist you in rebuilding your credit faster and cleaning up your credit report. No problem – simply put a clause into your proposal that allows you to do this at your option at any time with no advance notice or penalty of any kind. The creditor will always agree as they may get their money sooner than they expected.
A Consumer Proposal is not for everyone. But if you wish to customize it to meet your specific situation, if can be done.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
