You’ve tried a long list of strategies to pull yourself out of serious debt. You’ve tried credit counseling, budgeting apps, money-saving challenges, loans, and lottery tickets, and you’re still not out of this financial rut. Before you throw in the towel and prepare to file for personal bankruptcy, you should learn about one more debt relief strategy: consumer proposals.
What Is a Consumer Proposal?
A consumer proposal is a debt relief strategy meant for individuals that have less than $250,000 in debt (not including the mortgage of their primary residence). The proposal is a legally binding agreement made between a debtor and their creditors, lowering their total debt amount in order to make their repayment more manageable.
The debtor can start a proposal with the help of a licensed insolvency trustee. Together, they create the proposal’s terms and send them to creditors. If the majority of creditors agree to these terms, the process officially begins. Click on the link Davidsklar.com/consumer-proposal-services/ to learn more details about consumer proposals and what you can expect when you file for one.
The Benefits of Filing for a Consumer Proposal:
No Interest Charges
Your debt doesn’t sit still. If it did, you could ignore it until you had saved up enough to repay it in a lump sum. Because of interest rates and penalties like late fees, your debt is going to keep growing until you finish paying it off.
When a consumer proposal is in-progress, you don’t have to worry about interest and other penaltiesaffecting your debt load. All of those extra fees are off the table the moment that creditors sign the proposal.
A Real Timeline
An IPSOS poll by the Manulife Bank of Canada revealed that around 40% of Canadians doubt that they will ever be free of debt. Almost half of the country thinks that they will be paying off their financial burdens for the rest of their lives.
One of the biggest benefits of a consumer proposal is that it gives you a timeline. The payment process lasts for a maximum of five years. After reaching that time limit, your debts from the proposal’s creditors will be considered paid in full. The burden will be gone.
Another benefit that can come with a consumer proposal is that it offers you some stress relief. After worrying about outstanding debts for years, you can finally take a breath and see that your repayment is under careful control.
Eliminating financial stress can have a rippleeffect on the rest of your life. A study from the Canadian Payroll Association found that financial stress affects work productivity for employees. Other studies have found that debt worries can negatively affect your physical health, causing everything from stomach ulcers to insomnia. Filing for a consumer proposal could make you feel healthier, happier and more productive than ever.
And, finally, one of the top advantages of filing for a consumer proposal is simple: it prevents you from filing for personal bankruptcy. It’s a popular alternative that you can turn to when you’re determined to get out of debt and get a fresh start.