Consumer Proposal over Bankruptcy Any Time
Being in debt is an annoying trap that a lot of Americans seem to fall into. The worst part is some of them continue to sink way deep down that hole until there’s no light left to see. It may be a morbid analogy, but it is a harsh reality that can happen to you if you’re not careful. Unlike really falling into a deadly trap, though, you have the option of throwing in the towel when you cannot pay off your debts anymore. In this case, it’s called bankruptcy.
Unfortunately, filing for bankruptcy may get you into even more financial trouble. Bankruptcy would put a blemish on your credit record that would last for at least 6 years. This is definitely not good to hear. For one thing, availing for new loans or even credit cards will be next to impossible during that period. You will have no other choice then than to get rid of that stain as soon as possible by selling various assets.
Now that you’re enlightened about the devastating negatives bankruptcy can bring, it’s time to look at a more adequate solution you should first consider. If you are one of the hopeless debt acquirers who still happen to have a source of steady income and could still somehow pay their monthly bills, then take heed of this solution: consumer proposal.
In the most basic sense, a consumer proposal is a kind of arrangement where you simply ask for your creditors to lessen the amount you have to pay them. You cannot be blamed if you’ve never heard of this, as for some reason, it is a way out that’s often overlooked. On the flip side, you might ask why the creditors should agree to such terms. Well, filing for bankruptcy will not really do much with the creditors in the long run as compared to you still continuing to pay them. So giving them your consumer proposal will also present them an alternative that might prove more advantageous to both parties.
And what advantages you can have. Consumer proposals allow a less harmful effect on your credit rating. You also won’t face the prospect of losing any assets. In the issue of interest, the rate will be fixed during the repayment period. Other freezes include wage garnishment and several other collection processes that you are required to undergo. Finally, as mentioned above, you will only pay for at least 20% of the total debt amount hanging on your head.
To get you started with your proposal, you should hire the help of a professional trustee. This person will assist you in readying your proposal and presenting it to the creditors in question. And you need all the help you can get, as getting it approved means 75% or more of your creditors give their thumbs up. If it ever gets rejected, the trustee and you will then set up a meeting for further renegotiations.
As you can see, your decision on paying off huge debts should point towards vying for approval of a consumer proposal. If nothing else, anything is better than bankruptcy, and this is one of those things that make bankruptcy even more of a bad idea.
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