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February 2019 - WHAT IS A CONSUMER PROPOSAL?

WHAT IS A CONSUMER PROPOSAL?

☳ by Adam Aspilla

There are many ways of addressing financial problems, like: Mortgage Refinancing, (equity take out), Liquidation of Assets, Debt Settlement, Credit Counselling, Debt Negotiation and Consumer Proposal. The question is “What is a Consumer Proposal?”

 

Consumer Proposal, as the name implies is to make a proposal to your creditors to pay less than what you owe. There are two kinds of proposals: the first, Informal Proposal and the second, Formal Proposal.

 

In an Informal proposal, your creditors are not bound to accept to whatever amount is acceptable to your creditor or creditors who hold more than 50% of your total debts, while in a Formal Proposal all your creditors are bound to accept to whatever is the amount acceptable by your creditor or creditors who hold more than 50% of your total debts.

 

Moreover, in an Informal Proposal you can do it yourself, while in a Formal Proposal you need services of a Consumer Proposal Administrator.

 

In a Consumer Proposal just like in Credit Counselling only unsecure debts (without security or collateral) are included, and, it is interest-free.

 

The amount of your proposal would depend on the total amount of your debts, net monthly income, dependents, and assets.  Full payment of the accepted proposed-amount should be made within sixty months.

 

Furthermore, should you default on your payments your proposal would be cancelled and your creditors would pursue to collect the amount you owe before you made a Consumer Proposal.

 

In addition, if you have sufficient assets like: equity on your house and investments, you could not qualify for Consumer Proposal, as your creditors would demand to liquidate those assets to pay off your debts.

 

If a Consumer Proposal is not appropriate on your financial situation, you may consider Debt Consolidation, Mortgage Refinancing (equity take out), Liquidation of Assets, Debt Settlement, or Credit Counselling, Debt Negotiation as above mentioned.

 

Should any of the above is not applicable to your financial circumstance you may consider bankruptcy as a last resort.

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Adam Aspilla operates the Debt Clinic of Canada Inc. for the last 30 years.  He was a former financial planner, a former mortgage broker, and the author of the book, You Can Negotiate All Your Debts.  He also writes another column, “Biblical Perspectives” in this paper. For a free initial, expert, professional and confidential financial consultation on your financial problems like: Debt Consolidation, Credit Counseling, Consumer Proposal, Bankruptcy, 1st and 2nd Mortgages, call 905-970-0439 or visit www.debtcliniccanada.ca

 

Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.