What Is a Consumer Proposal and How Can It Help You?

When it comes to financial problems, we often hear about bankruptcy. But did you know that there’s another way to get out of over-indebtedness? A consumer proposal is a viable solution to debt. It offers the possibility to avoid bankruptcy by negotiating a reduction in your debts.

Find out more about the consumer proposal below!

The Benefits of a Consumer Proposal

One of the advantages of a consumer proposal is that it takes your financial situation into account. The repayment of your reduced debt can be spread over several years, depending on your monthly budget. Your financial situation dictates the amount you pay each month.

As a result, you don’t have to make the minimum payments required for each of your credit cards. Nor are you obliged to pay the amount imposed by your respective creditors. This gives you greater freedom.

The Role of a Licensed Insolvency Trustee

You must involve a licensed insolvency trustee (LIT) to submit a consumer proposal. The trustee is responsible for preparing the proposal and submitting it to the Office of the Superintendent of Bankruptcy. He or she is also in charge of presenting the proposal to creditors.

The law requires the involvement of a LIT to file a consumer proposal. Licensed insolvency trustees act as an intermediary between an individual and his or her creditors. Therefore, as soon as a professional from M. Roy Associés becomes involved in your case, your creditors are no longer allowed to contact you directly. They will be legally obligated to communicate exclusively with your trustee.

Licensed insolvency trustees also manage the negotiations. They ensure that the agreement reached respects his client’s ability to repay while pleasing the creditors. Thanks to the agreement negotiated by your trustee, debts can be reduced by 50% or more. Finally, your trustee is also responsible for collecting your monthly payments and distributing them to creditors.

Why Is the Consumer Proposal Worthwhile?

The consumer proposal offers two other major advantages. First, there’s no interest to pay on the reduced debt. In addition, the trustee’s fees are included in the monthly payments. There’s no need to anticipate the payment of the trustee’s fees. This will allow you to reestablish your credit record, one step at a time.

Now you know why a consumer proposal is considered a complete, all-in-one debt solution. But how do you know if this solution is right for you?

The Consumer Proposition: Is It for Me?

A consumer proposal is a great alternative if you are able to offer your creditors a reasonable amount. It’s a good way to regain control of your financial situation, especially if you own certain assets. Rest assured, however, that you will be able to keep all your assets as part of your consumer proposal.

Here are the most common profiles of individuals who opt for a consumer proposal as a solution to their over-indebtedness:

• Your monthly revenues allow you to pay off part of your debts and cover your basic needs.
• Your asset’s value exceeds the amount of the associated debt (home mortgage, car loan, etc.).
• You’ve already filed for bankruptcy in the past, and you do not wish to file for a second one.
• You want to avoid bankruptcy for reasons other than financial ones. For example, to preserve your license or your right to practice with a professional body.

For answers to your questions on consumer proposals, don’t hesitate to contact M. Roy Associés. Together, we can determine if this solution is best suited to your financial situation. At M. Roy Associés, every meeting is confidential. You can therefore discuss your situation without a worry.

Get a free initial meeting today by contacting our team at 1-877-352-6661 or by filling out the online form available here.