Importance of a Consumer Proposal
Consumer proposals are government approved documents that help someone in Canada to settle his or her debts. Most people prefer the consumer proposal to declaration of bankruptcy. A consumer proposal or bankruptcy method are used when people have so many debts that are difficult for them to pay. Bankruptcy has so many disadvantages that make people opt to file a consumer proposal to settle their debts. The good news about filing a consumer proposal is that the binding agreements protects you against debt collectors by giving you a plan on how to repay the loan. Creditors like the consumer proposal because of its plan of the person to pay them some partial payment. For your consumer proposal to qualify, it has to be accepted by half the number of your creditors after which you are supposed to attend two credit counseling sessions whereby you are taught on budgeting. Some of the consumer proposal benefits are discussed below.
A consumer proposal helps you to protect your property including cars, houses and any other asset that you might own. This gives you a lot of peace of mind because even as you do your daily activities you are not stressed of your property getting away with the creditors. In a case whereby you start earning more cash than before the money is still protected and you continue paying your loan just the same way as you started paying it. In bankruptcy your assets are at a risk of being taken by creditors but in a consumer proposal you always know the property is protected.
When you get the consumer proposal, you are able to pay lower monthly payments. In this proposal you are allowed to negotiate the amount you will be paying per month according to your debt. In most cases you even find that the debt has been reduced by 70% of the actual debt that you have. The reason as to why most people go the consumer proposal way is because the options of debt consolidation are very safe and the best. No interests incurred during the proposal period therefore good savings are achieved over mortgage.
A consumer proposal helps the person with the debt to get a creditor protection. In this it means that no creditor is allowed to stress you because you already have a legal document of how you should pay him or her. As long as your consumer proposal has been accepted by half of your creditors then all the creditors should adhere to the terms and conditions of the proposal. The act that covers the consumer proposal is known as the act of bankruptcy and insolvency.
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