DEBT RELIEF OPTIONS IN NEWMARKET, ONTARIO
What is a Consumer Proposal?
A Consumer Proposal is a federally regulated, legally binding process overseen by the Office of the Superintendent of Bankruptcy. It is an alternative to declaring personal bankruptcy and can only be facilitated by a Licensed Insolvency Trustee. Your income and assets largely determine the repayment amount. The essential advantage of a Consumer Proposal is its potential to reduce unsecured debt by up to 80%.
The Licensed Insolvency Trustee will assess your financial situation and propose a monthly payment within your means. This proposal is then sent to your unsecured creditors, and if they accept it, the agreement becomes legally binding. The Consumer Proposal has a maximum repayment period of five years, but you have the flexibility to settle it earlier. Upon filing the proposal, all legal actions against you, such as wage garnishments or harassing calls from collection agencies, will cease.
In addition to the substantial debt reduction, a Consumer Proposal can lead to lower monthly payments, the cessation of interest charges, and the consolidation of unsecured debts into a single monthly payment.
What Debts are Included in a Consumer Proposal?
A consumer proposal covers most unsecured debt. This includes most types of debt not secured by an asset, such as a house or car. Generally, the following can be included in a consumer proposal:
- Credit card debt
- Personal loans – this includes lines of credit, consolidation loans or renovation loans, as long as no assets have been used to secure the debt.
- Payday loans
- Student loans – if you have ceased to be a student at least seven years ago
- Income tax debt – this includes amounts owing for personal income tax (including penalties and interest), GST debts, Canada Child Benefits overpayments, CPP and OAS overpayments.