Advantages and Disadvantages of a Consumer Proposal
The Advantages of a Consumer Proposal
- Stops all collection calls
- Stops all garnishments of your pay
- Stops all future interest charges
- Stops legal actions taken by your creditors
- Avoid filing for bankruptcy
- Protect your assets
- Pay back only a fraction of the total amount you owe
- It is a legally binding agreement. No false promises.
- One affordable monthly payment covers all fees and payment to your creditors
- Proposal payments can be up to a 5-year term. This helps to keep your monthly amount to a reasonable affordable amount
- A better credit rating than a bankruptcy (an R7 vs. an R9 in a bankruptcy) and
- Gives you a Fresh Start. This could be the solution to get yourself out of your debt problems and rebuild your life.
The Disadvantages of a Consumer Proposal
- Income or financial assistance (from family or friends) is required to fund the monthly proposal payments
- Creditors vote if they want to accept or reject your proposal
- Not all debts are discharged (erased) and
- Results in an R7 credit rating and stays on your records for 3 years after your last payment.
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