If you ever find yourself in a situation where you are having some serious money problems, but you're pretty sure you aren't interested in bankruptcy, it can be frightening. Luckily, there is a way you can lighten the load and deal with your money problems without filing for bankruptcy, and it's called a consumer proposal. A consumer proposal is a settlement between you and your creditors that's legally binding. A standard consumer proposal would have you make one monthly payment that lasts no more than five years. Each payment is scattered equally among your creditors, and once the last payment has been made, you are debt free. The benefit of a consumer proposal is that you will end up paying less than the full amount of your debts by the time you're done with the monthly payments, but you'll still be free of debt.
If you were interested, you would locate a legal office that offer consumer proposal services and explain your situation. In order to qualify, your money problems must be such that your debts are greater than your assets. You must also be capable of paying a portion of the debt off. Other requirements for filing a consumer proposal include having unsecured debt that's no higher than $250,000. This figure doesn't have to include your mortgage.
Some other considerations for a consumer proposal to work for you are the ability to make monthly payments consistently, but the inability to make your full payments with interest. Once you file a consumer proposal, the interest on your debts stops accumulating, and you can usually negotiate how much each monthly payment is going to be. Some of the debts included in a consumer proposal are your credit cards, income taxes, bank loans and payday loans. Since these types of debts make up a good portion of the debt of a lot of people, a consumer proposal is often a desirable choice. It also enables you to carry on as you normally would, working at your job and making regular payments. The stigma associated with a bankruptcy is largely absent when you choose a consumer proposal to deal with your money problems.
Even though your money problems are large, creditors will stop calling you as soon as you file a consumer proposal. You won't end up losing any of your assets, and your credit rating will take less of a hit than if you had filed for bankruptcy. And even though your creditors aren't getting all of their money, they'll still get more than they would if you filed for bankruptcy, so they are usually more than willing to participate. Some financial obligations like alimony or child support, student loans, mortgages and car loans are not affected by filing for a consumer proposal. Generally, the debts you're able to affect with the consumer proposal will be worked out ahead of time and you won't be able to just pick and choose the ones you want included.
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