DEBT RELIEF OPTIONS IN KITCHENER, ONTARIO
What is a Consumer Proposal?
The Consumer Proposal is a federally regulated, legally binding process overseen by the Office of the Superintendent of Bankruptcy. It is an attractive alternative to declaring personal bankruptcy and, just like bankruptcy, is exclusively administered by a Licensed Insolvency Trustee (LIT). One of the most significant benefits of a consumer proposal is that you can reduce the debt you must repay by up to 80%.
The process begins with a Licensed Insolvency Trustee evaluating your financial situation by reviewing your debts, income and assets to determine if a consumer proposal is the best solution. They will calculate a monthly payment you can afford if they determine it is. They will then submit the proposal to your unsecured creditors for approval, and once this is received, it will become legally binding. As soon as the proposal is submitted, all legal actions against you, such as wage garnishments or collection calls, will end. A consumer proposal’s maximum repayment period is five years, but you can pay it off at any time before that.
Beyond the considerable debt reduction, a Consumer Proposal can result in reduced monthly payments, cessation of interest charges, and the consolidation of unsecured debts into a singular monthly payment.
What Debts are Covered in a Consumer Proposal?
A consumer proposal encompasses most unsecured debts, which means that any debt secured by an asset, such as a mortgage or car loan, cannot be included in a consumer proposal in Kitchener. Typically, the following can be included in a consumer proposal:
- Credit card debt
- Personal loans, including lines of credit, consolidation, or renovation loans, provided no assets secure the debt.
- Payday loans
- Student loans, if you stopped to be a student at least seven years ago
- Income tax debt, encompassing amounts owed for personal income tax (including penalties and interest), GST debts, Canada Child Benefits overpayments, CPP, and OAS overpayments.