What Is A Consumer Proposal In Canada Pros And Cons-tamiflu

Finance Individuals and businesses in Canada are very fortunate to have many options available to them should they run into financial problems. One option that many individuals and businesses with unmanageable debt choose is a consumer proposal. What is a consumer proposal in Canada? Well, a consumer proposal is a legal option mandated by the Federal Government. It enables consumers and businesses to settle debt at much less than they owe, freeze interest and make a single monthly payment that is disbursed to their creditors. Generally, a consumer proposal becomes an option when individuals or businesses are bringing in much less income than they were at the time they took out credit. This could occur due to job loss, disability, divorce, or loss of contracts or business. Another scenario where a person may consider a consumer proposal is when he or she has racked up a lot of debt and is only making minimum monthly payments with no reasonable ability to pay off the overall debt. The common denominator is that debt has become unmanageable and the individual or business that is in debt needs debt relief. The single biggest "con" as it relates to a consumer proposal is the myth that it will hurt an individual’s credit. A consumer proposal will remain on an individual’s credit report for 3 years from the date it is paid in full. This is a non-issue where the party has already begun defaulting on money owed to creditors because he will have likely already damaged his credit for a long period of time. When an item goes into default on an individual’s credit, it will remain there for 6 years from the date it is paid in full. Consumer proposals offer many "pros". First, a consumer proposal provides debt relief. Once a consumer proposal has been accepted, all creditors must stop any enforcement action being taken. Enforcements actions like frozen bank accounts and wage garnishments will be stopped immediately. Second, a consumer proposal involves settling debt for less than what was originally owed. Third, consumer proposals enable the individual or business who files to make a single monthly payment that is much less than what they had been paying prior to filing the consumer proposal. Trustees in Bankruptcy administer consumer proposals. This can pose a challenge because trustees act for the creditors involved in the proposal, in addition to the individual or business who is filing it. They are compensated based on the size of the consumer proposal they negotiate. These two factors can often result in the individual or business filing the consumer proposal not getting the best deal. How do you know that a consumer proposal is the best option to deal with your financial problem? There is no easy answer to this question. The right answer to your financial problem will depend on your personal circumstances. Determining the right choice will involve a detailed review of your assets, liabilities and budget. About the Author: Michael Goldenberg is the founder and President of DebtCare Canada. DebtCare Canada helps people who struggle with financial problems. For more information about Michael or the services offered by DebtCare please visit .debtcare.ca, .debtcareservices.ca or call 416-907-2582. Article Published On: 相关的主题文章: