Consumer Proposals in Cambridge

Would you be surprised to know that more than 50% of people in Cambridge, Ontario who seek protection from their creditors by filing for insolvency do not file bankruptcy? Instead they file one of Canada’s best alternatives to bankruptcy – a consumer proposal.

What is a Consumer Proposal?

A consumer proposal is simply an agreement with your creditors to repay a portion of what you owe in settlement of your outstanding debts. It is a legally binding contract between you and your creditors, negotiated on your behalf by a consumer proposal administrator.   In this agreement you agree to pay a portion of what you owe, usually over time, and in exchange your creditors forgive the remaining debt owing.

If you are struggling with too much debt, the first thing to do is to talk to a consumer proposal administrator.  In Canada a consumer proposal administrator is also a licensed trustee in bankruptcy. So when you meet with a trustee in bankruptcy in Cambridge they will talk to you about the benefits of filing a consumer proposal in Cambridge as well. At Hoyes, Michalos we will ask you some questions about your particular situation, discuss the advantages of filing a consumer proposal instead of a bankruptcy and help you determine if a consumer proposal would be a better choice for you.

Benefits Of Filing A Consumer Proposal in Cambridge

If you live or work in Cambridge and are having financial difficulties, you may want to consider the 5 main benefits of a consumer proposal:

  • You receive immediate protection from your creditors. Wage garnishments stop. Collection calls will stop.
  • You settle your debts for a portion of what you owe, based on what you can afford to pay.
  • You make one single payment to your trustee during your proposal (either every pay or monthly as determined by your proposal arrangement).
  • You can keep your assets like your home or your car.
  • A consumer proposal may be less costly. If you are likely to have surplus income the cost of your bankruptcy would increase based on that income. Surplus income, however, is not a consideration in a consumer proposal.
  • Your credit score may recover faster than in a bankruptcy. A consumer proposal results in an R7 rating on your credit report, lower than the R9 rating received if you file personal bankruptcy. This rating remains on your credit report for 3 years after you complete your payments, compared to 6-7 years after your discharge in a bankruptcy.  The total time period this rating remains on your credit report will depend on how long it takes you to pay off your proposal but could be less than a bankruptcy in certain situations.

Who Is Eligible to File A Consumer Proposal?

A consumer proposal may be a better solution for you if:

  • your debts are more than $10,000 but less than $250,000 (not including your house mortgage);
  • you want to avoid bankruptcy and can afford the monthly payments in a proposal;
  • you might be subject to surplus income in a bankruptcy;
  • you have assets you would like to keep such as your home or car.

If your are having trouble paying your bills and are looking for a debt relief solution, I encourage you to contact me in Cambridge. You can call my Cambridge bankruptcy office at (519) 622-3773 or send me a message using the form on the right.