People who consider and declare bankruptcy are honest folks who have fallen into an unfortunate situation, usually through little to no fault of their own. Filing for bankruptcy can seem scary and intimidating, which is why you need to work with a compassionate Licensed Insolvency Trustee (formerly known as a bankruptcy trustee). These professionals help individuals and businesses that need to declare bankruptcy in Ontario due to insolvency.
A reliable and trustworthy bankruptcy trustee will listen and understand your situation fully before giving you suggestions about what to do next. Click here to learn more about major debt relief and to develop an idea about the available options.
When you get in touch with the trustees at the Toronto-based firm David Sklar and Associates, you get expertise about the system and proceedings for paying back your debt in a way that allows you to keep as many of your assets as possible. Many individuals and businesses who are considering bankruptcy might not have known about an alternative: filing a consumer proposal.
How Does It Work?
The specifics of how a consumer proposal works varies depending on the province, aside from specifics, it is a method of debt relief that allows the debtor to negotiate a settlement with their creditors to pay back a portion of the debt in regular intervals. Those who meet the criteria for a consumer proposal, one of which is having a steady source of income, enter an agreement with their creditors to pay less than the total of their debts in instalments over time.
Education Is Important
Are you wondering what happens when you declare bankruptcy? Popular depictions of bankruptcy in movies and television usually paint the process as a painful, scary time filled with repossession and broken relationships. But declaring bankruptcy in real life isn’t like it is in the movies, it’s a measured process done through a bankruptcy trustee.
Pros and Cons of a Consumer Proposal
As an alternative to bankruptcy, filing a consumer proposal is regularly one of the best ways to help individuals get out of debt. Filing a consumer proposal isn’t free, your bankruptcy trustee will collect a fee, but it’s well worth it to finalize your debts in the long term.
The pros of a consumer proposal outweigh the cons, but it’s important to note that no debt solution is the perfect catch-all solution and every person’s individual situation is different. For instance, some of the downsides of a consumer proposal include: a hit to your credit score, no amendment if you miss 3 months of payments, this only applies to unsecured debt (mortgages and car loans are not included).
The pros of a consumer proposal include: committing to stable monthly payments that do not change over time (this is not the case with bankruptcy), stopping wage garnishments, a smaller impact on your credit score (consumer proposal stays on your record for 3 years compared to bankruptcy’s 7). Start your path to debt-free living by consulting a bankruptcy trustee today.