A Consumer Proposal Can Solve Your Debt Problems

If you are currently in a situation where you cannot make full payments on your unsecured debts, you may be wondering how to obtain a consumer proposal. A consumer proposal is a legally binding contract between you and the creditors you owe a certain amount of money to. Creditors are often willing to accept these deals because they like to get more money on an ongoing basis, instead of waiting endlessly for full repayment which might never arrive. However, it is important to remember that a consumer proposal has little legal power of its own and is only used as a way to get your creditors to agree to a settlement with you. There are other more effective ways to obtain financial relief.

If you are considering a consumer proposal, you should also remember that even if you do get accepted into a plan, you are still not legally declared bankrupt. In fact, most consumer proposals fail at this point for the simple reason that the creditors realise that they will not be able to get the whole sum back. The remaining balance would have to come from somewhere else. This is why most proposals fail at this point, because people think that they have no choice but to declare bankruptcy. The fact that bankruptcy is a bad financial decision for most people makes the creditor's willingness to accept a proposal all the more important.

Instead of trying to force you into declaring bankruptcy, a creditor can use a consumer proposal. A creditor can simply offer you a repayment deal where you make regular payments into an account over a period of time. The account will be held by the creditor and they will recover their money each month from the money you pay into the account. You will not actually be declared bankrupt because you will be paying back a considerable portion of your debts with regular payments.

Another advantage of the consumer proposal is that it is easier to organise. Instead of approaching creditors one by one and trying to negotiate, you can send one large proposal. Your creditors will then consider your proposal and if they agree they can arrange for you to make regular payments into an account. This means that all your debts will be paid off and you will not be left with a huge number of debts to deal with.

There are many ways in which a creditor can access a consumer proposal. The easiest way is to use a company that specialises in these proposals. These companies will first assess your financial situation and write you out with their recommendations as to how much you should pay into an account. They then negotiate directly with all your creditors on your behalf, getting them to agree a payment plan that you can afford. Click here to learn more.

Using a consumer proposal instead of declaring bankruptcy will help you avoid the long term impact that bankruptcy will have on your credit rating. You will not lose your home or possessions, nor will you have to give up any assets that are not exempted from bankruptcy. You will also avoid paying taxes on any debts that are not exempt from bankruptcy. A consumer proposal can be used to quickly solve your debts problems, so it is the ideal solution for those who feel that other options, such as a fresh loan or borrowing from friends and family are not viable.

See more at https://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/bankruptcy-law