DEBT RELIEF OPTIONS IN MARKHAM, ONTARIO
Consumer Proposal
One of the most efficient debt relief options available is a consumer proposal. It is a legally binding contract with your creditors to address various unsecured debt issues, including credit card debt, tax debt, or personal loans.
Whether you can’t keep up with monthly payments, don’t qualify for a debt consolidation loan, or have a higher debt than your assets, a consumer proposal might be the right solution. Overseen by a Licensed Insolvency Trustee (LIT) and legislated by the federal government, a consumer proposal allows you to consolidate and settle your debt for less than you owe.
One of our LITs will begin the process by thoroughly assessing your financial situation to determine if a consumer proposal is the best solution. If this is the case, we will establish a realistic monthly payment you can afford. Your LIT will submit the proposal to creditors for approval. If they agree, it will become legally binding, and you will begin making monthly payments to your LIT. Once all proposal conditions are met, the remaining unsecured debt is discharged (written off).
Key benefits of a consumer proposal include:
- Discharging up to 80% of your debt
- Halting legal actions, such as wage garnishments or frozen bank accounts
- Ending collection calls
- Retaining all assets, including tax refunds
- No additional interest on included debts
Note that only Licensed Insolvency Trustees (LIT), like Chande Debt Solutions, are authorized to file consumer proposals.
Debt Consolidation vs. Consumer Proposal
Debt consolidation is the first consideration for many Canadians seeking debt relief in Markham. As long as you continue making your payments on time, it does not negatively impact your credit score, and you don’t have to deal with a third party. However, it comes with significant drawbacks, such as often high interest rates and not addressing any underlying reasons for your financial issues, so you remain at risk for the same problems returning.
On the other hand, a consumer proposal will negatively impact your credit score. Still, it offers significant benefits, including discharging up to 80% of your unsecured debt, stopping legal actions like wage garnishments and collection calls, and eliminating additional interest on included debts.
Personal Bankruptcy
Personal bankruptcy is typically viewed as a last resort when other options fail. Although it provides a swift and cost-effective way to clear debt, it significantly affects your credit score and may impact your assets. In some situations, bankruptcy may be the only viable option.
