Importance of a Consumer Proposal
Citizens in Canada are at a good position because they have a document known as the consumer proposal which help them to pay their debts easily. Most people prefer the consumer proposal to declaration of bankruptcy. A consumer proposal or bankruptcy method are used when people have so many debts that are difficult for them to pay. Bankruptcy has so many disadvantages that make people opt to file a consumer proposal to settle their debts. The good news about filing a consumer proposal is that the binding agreements protects you against debt collectors by giving you a plan on how to repay the loan. Most of the creditors prefer the consumer proposal deal to the bankruptcy one because they at least get some partial payment. It is a must to attend a credit counseling session after your proposal has been accepted by half of the creditors and it has been approved. Some of the consumer proposal benefits are discussed below.
The biggest benefit of a consumer proposal is that it gives you protection over your assets like cars, land and even houses that you have. This gives you a lot of peace of mind because even as you do your daily activities you are not stressed of your property getting away with the creditors. If by any chance you start getting better payment it does not change the amount you were paying monthly so it remains fixed. When you declare yourself bankrupt it means your property can be taken by the creditors anytime and this is not a good idea so if you have debts that you find hard to pay it is good to take a consumer proposal so as to save your assets.
Your monthly payments lower after you file a consumer proposal. In this proposal you are allowed to negotiate the amount you will be paying per month according to your debt. Most debts are even at times reduced by a very big percentage of the actual debt that someone has. The reason as to why most people go the consumer proposal way is because the options of debt consolidation are very safe and the best. There are no interests during this period of a consumer proposal and so you get good savings over second mortgage or over a debt consolidation.
Another advantage of a consumer proposal is that someone acquires consumer protection. This creditor protection allows you to have peace because no creditor disturbs or gives you pressure because there is a plan on how to pay them. The consumer proposal has some agreements that bind all creditors together according to the agreement and so no creditor should refuse it as long as it is approved. The act that covers the consumer proposal is known as the act of bankruptcy and insolvency.