Simply put, a consumer proposal is a "let's do a deal" offer to your unsecured creditors. That's the deal. You describe your circumstances. Your total unsecured debt is much higher than you can actually afford to pay now or anytime in the near future.
However, you can actually make one flat payment each month for a maximum of 5 years, which allows you to pay half of the amount due. or 30% of your debt; or even 20% of your debt. You can also look for the best consumer proposal in Toronto via an online source.
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Why would a sane lender take only 20 cents? Simply put, even 20% better than the small amount they can return when you run out of options and go broke. Depending on your circumstances, some of your creditors may not go bankrupt.
This leaves the customer offering a potential "win / win" situation for you and your creditors. They avoided bankruptcy and got their debt back.
What individual offers can do for you
The greatest benefit is the legal protection you get – the same protection that a bankruptcy statement offers. If in any way you have been followed by loan collectors – threatening letters and phone calls;
Salary allowance; Bank account attachments; or freehold – these will cease once your offer is accepted.
In addition, your creditors are prohibited from contacting you in any way at any time during the offer. Another great benefit is asset protection. One of the main reasons Canadians with many valuable assets fear bankruptcy is to realize that if they explain this, they will lose some of what they own.
With a consumer proposal, you keep everything as long as you continue to make payments on time until the offer ends.